Annual Report 2010

28/04/2011

An Post 2010 Financial Results

  • €5.8m operating profit
  • Strong Retail and Subsidiary performance
  • Turnover maintained at ’09 levels despite 7% mail volume fall
  • Sustained Quality of Service improvement

Cost reductions, improved efficiencies and investment in new revenue streams combined to deliver a €5.8m operating profit for An Post in 2010, compared to €5.7m the previous year. 

Group turnover of €805m just exceeded that of 2009 (€804m), a good result in the context of the ongoing difficulties facing the Irish economy.  Mail income contributed €552.3m to turnover, a reduction of €13.3m (2.4%) on 2009.

The ongoing effects of the recession on every Irish business, as well as increasing electronic substitution and competition are now well established realities impacting right across An Post’s business. Traditional mail volumes declined by approximately 7% during 2010 – a full 1% decline was directly related to the weather disruption at the end of the year.

An exceptional provision of €20m for Voluntary Severance/Voluntary Early Retirement costs of €20m, together with an FRS 17 pension fund charge of €3.9m (see notes) and a €6.6m cost arising from the wind-down of Postbank combined to produce a Group loss after tax of €24.7m.

A reduction of €26m (3.5%) in core An Post company operating costs to €740.4m was achieved mainly through reducing the core FTE (Full-Time Equivalent) numbers by 331.  This is in addition to an FTE reduction of 402 the previous year.

An overall FTE reduction of 1,975 will be necessary between 2010 and 2015 to offset the business realities resulting from recession, falling mail volumes and increasing competition. This will be achieved through voluntary exit schemes, non-replacement of staff, on-going overtime reduction and work process improvement.

Company Chairman, Mr John Fitzgerald said that despite the difficult economic environment last year, An Post again proved its ability to adapt to changing circumstances. 

“Significant cost savings were achieved in relation to pay and non-pay costs. Capital expenditure of €47m was invested in areas critical to the Company’s future success such as parcel and packet services and new retail products, all funded from An Post’s own cash resources.  An Post will continue to invest in the foundations of future business whilst adapting to the commercial realities which continue to unfold for Ireland and for the global postal sector,” he added.

For the fourth successive year, An Post delivered record domestic Quality of Service results and continued to meet and exceed EU targets for improvement in the handling of incoming and outgoing international mail.

An Post’s retail business performed very strongly once again and a further €3.1bn was invested in State Savings products during 2010.   Transactions across the full range of financial and communications services increased steadily in tandem with investment in retail facilities including customer information systems, on-line terminals and general outlet improvements. Retailing and customer services training continued across An Post-run and contractor-operated branches and the computerisation of all small rural post offices was completed, enabling customers to avail of a broader range of services locally.

The difficult but necessary decision to achieve an orderly wind-down of Postbank was taken by An Post and BNP Paribas in February 2010 and was fully complete by December.  One Direct and PostPoint were bought back by An Post as part of the joint venture wind-down agreement. 

While the mails division remains by far the largest part of An Post’s business, handling over 2.5m items every working day, the Group’s subsidiary companies increased their impact on the business during 2010 with combined revenues increasing from €46m to €67m.

As is the case with most defined benefit pension funds, An Post’s scheme falls short of meeting the necessary Minimum Funding Standard, despite its deficit reducing to €368m last year from €403m the previous year and €582m in 2008.  The Company is working with the Trustees and employee representatives on the development of an agreed plan to address this situation.

Chief Executive, Mr Donal Connell said that An Post achieved improvement across all key aspects of its business – quality of service, cost containment and the broadening of the revenue base.
 
“We will continue to align the Company, its structures and resources with the changing business reality and we look to the future in this fully liberalised mails market with confidence and a strong belief in our ability to deliver on every level. 

“As a critical channel for every aspect of Irish life and business, a major employer across the State and a significant buyer of goods and services, An Post can be relied upon to play a full and active part in the national recovery programme,” he added.

View (new window) Annual Report 2010 online.

notes: 
FRS 17 Pension Related Charge The pension fund deficit decreased from €403m at 31 December, 2009 to €368m at 31 December, 2010 reflecting the continued recovery in the value of the scheme assets.  In line with Generally Accepted Accounting Principles (GAAP) this charge is based on the value of the An Post Pension Fund assets at the end of 2009. This charge is expected to reduce further this year as a result of the fund’s improved performance in 2010.

FTEs (Full-Time Equivalents):  The total of part-time, casual and full-time staffing plus overtime hours expressed as units of full-time staff.

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