An Post reports €10m loss as pandemic increases costs

Company reported profit of €33m last year before depreciation

An Post lost €10 million last year as Covid-19 added to the State mail company's costs, according to figures released on Thursday.

David McRedmond, An Post chief executive, said revenues at the business grew 2.6 per cent last year to €915 million from €832 million in 2019.

The company lost €10 million during the year, but showed a profit of €33 million before calculating for depreciation and other costs.

Chief financial officer Peter Quinn explained that the Covid-19 pandemic increased the company's costs last year.

Extra expenses included €17.3 million for personal protective equipment and staff cover.

Deferring a proposed increase in stamp prices added a further €10 million, while a loss of business, stemming from fewer customers using its post offices left an estimated €14.2 million deficit.

However, Mr Quinn added that the company also saved €15 million during the year.

‘No recourse’

Mr McRedmond pointed out that An Post funded all Covid costs from its own resources, with “no recourse” to Government aid or furloughs.

"We kept all our delivery networks open, we were almost unique in Europe in doing that," he added.

Increased online shopping, sparked by Covid restrictions, boosted parcel deliveries by 100 per cent last year, and by 300 per cent in the run-up to Christmas.

The company ended 2020 with €81 million in unrestricted cash. It also had a pension fund surplus of more than €100 million.

Assets under the scheme’s control were almost €3.8 billion on December 31st while the liabilities stood at €3.67 billion.

Meanwhile, revenues rose 11 per cent to €202 million in the first three months of this year while An Post earned operating profits of €2.5 million during that quarter.

Parcels business

Parcel volumes have fallen 20 per cent since shops reopened following the easing of Government pandemic restrictions.

Garrett Bridgeman, An Post managing director and chief operations officer, mails and parcels, explained that this has been the trend elsewhere.

He added that the State company expects the parcels business to grow 15 per cent next year and at the same rate thereafter.

An Post will invest €200 million to €300 million in its businesses over the next five years through its Green Light Programme.

This aims to position the business to cash in on new trends such as consumers’ increased use of e-commerce and reliance on parcel deliveries.

The company aims to increase revenues to €1 billion a year over the course of the plan and calculates that it will make net margins of 7 per cent to 10 per cent.

Green Light will focus on boosting profitability through rebuilding its logistics network to handle increased e-commerce demand.

It will also change its post offices to provide including banking, out-of-home e-commerce and Government services.

Commenting on the results, Mr McRedmond said An Post’s financial recovery in previous years allowed it to fully fund its Covid costs.

Continuing momentum

“The revenue growth showed continuing momentum in An Post’s strategy which has accelerated even further in the first quarter of 2021,” he added.

"We have ambitious plans, and the momentum, to grow the business as an essential infrastructure for Ireland. "

Mr Quinn pointed out that generating earnings before depreciation and other costs showed the resilience of An Post’s core business.

“There is great potential for An Post to play a leading role in the recovery and to generate sustainable earnings,” he said.

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