Increased stamp price pays off as revenue returns to 2008 levels at An Post
An Post has announced a turned around in its financials in 2017, reporting a profit of €8.4m for the year, from a loss of €12.4m in 2016.
The State-owned group credited the mid-year price increase to a €1 stamp, and "massively increased" parcel volumes for its improved performance, both of which it said offset offset traditional mail volume decline.
During the year the extension of the delivery service to Saturdays and late-night cut-offs allowed An Post to regain a "significant share" of the burgeoning parcels market and achieve 30pc year-on year volume growth, An Post said.
Revenue is now back to 2008 levels, the group said in its results statement today.
Including gains from the sale of Cardiff Lane in Dublin 2, and a refinancing dividend from Premier Lotteries Ireland of €9m, An Post had a profit before taxation of €49.6m in 2017.
Commenting on the results, David McRedmond, chief executive of An Post, said that the group had achieved a "substantial turnaround of its business."
"With the restructuring into two core businesses, the reinvigoration of management, the collaboration with the staff and Unions, especially the CWU, and the backing of Government, the future is bright."
"An Post is the enabler of e-commerce, and will play an increasingly important role partnering the digital economy," Mr McRedmond added.
In relation to the stamp increase, An Post said that the 38pc headline increase (20pc average increase across all products) saw mail volume decline run-rate go from -7pc to -9.5pc, which the group said was a more favourable outcome than suggested.
The improved performance is all the more impressive given that, based on its 2016 performance, professional services firm PwC had forecast losses of €61m for An Post in 2017 if "radical action" was not taken.
During the year An Post also undertook a major strategy review with consulting firm McKinsey & Co, that sees the company split into its two major businesses; the Mails & Parcels Service and the Post Office Network.
As part of this restructuring, the management team has been reduced from 11 to six executives. While it also implemented a number of cost cutting measures during the year, including reducing the mail and parcels business headcount by 316 full-time employees.
The company cited a number of highlights during the year, including the relaunched and redesigned parcels service, resulting from a close collaboration between management and the Communications Workers’ Union (CWU).
Meanwhile, An Post said that its Retail Business team, which encompasses Post Offices, Post Insurance, BillPay, and State Savings operations, is engaged in a "major plan" for the renewal and reinvention of the network, expanding the range of financial products, Government services and e-commerce (parcels).