An Post wants to cut 1,000 jobs despite profit

AN POST has returned to profitability for the first time since 2000 but still wants to increase the price of a stamp to 60 cent and cut its workforce by another 1,000 employees.

Announcing its annual results for 2004, the company insisted it was still unable to pay its 10,000 staff increases due under the Sustaining Progress agreement, despite the turnaround in its performance.

An Post yesterday reported an after-tax profit of €6.5m last year which it attributed to the success of a strategic recovery plan to slash costs.

However, consumers may soon be facing a 25% increase in the cost of the standard 48c stamp if ComReg approves An Post's application for a price increase to €0.60 later this year.

An Post chief executive Donal Curtin said such an increase was vital to sustain the company's future as it was continuing to experience "a difficult trading environment". He also said the company needed to cut another 1,000 jobs and change work practices to get its costs under control.

"Such measures will determine the financial stability of the company in the medium term," he said. "There has been real and measurable progress but there is still a long way to go."

Mr Curtin said An Post was still unable to pay around €60m due to staff under current national wage agreements. "The reality is that we just don't have the cash to pay it. Our profitability is paper thin," Mr Curtin said.

Although An Post directors received increases in fees and pension contributions last year, Mr Curtin said his salary had remained the same since he joined the company in July 2003. He claimed further delays by ComReg on price increases and by the Labour Court in issuing a ruling on changes to work practices were compounding An Post's difficult financial position.

Revenues at the troubled company remain under pressure with the threat of a decline in social welfare payments through the post office network, which account for 50% of An Post's retail business. The number of items posted also fell by 1.3% last year, while An Post's second biggest customer, the National Treasury Management Agency, is seeking a 40% reduction in its charges.

Mr Curtin expressed dissatisfaction with the quality of An Post's delivery service which was recently criticised by ComReg after a survey showed that only 72% of normal mail was delivered the following day. Turnover at An Post rose almost 6% to €750.2m last year, while operating costs fell for the first time since 2000 by almost €4m to €748m. The company reported an operating profit of €1.8m.