The South African Post Office was expected to produce a much lower net profit in the year to March than the previous financial year, group chief financial officer Nic Buick said yesterday. He attributed this to extremely difficult conditions both locally and internationally.
The state-owned organisation had budgeted for a rise in revenue but it was likely to be 4% lower (R5,5bn) than last year’s R5,7bn, Buick said during a briefing to Parliament’s communications committee on the Post Office’s activities and financial performance.
Operating profit was expected to be 26% lower and net profit to plunge 32% to R249m from last year’s R366m. Expenses were cut by about R100m by slashing marketing costs 50%; renegotiating bank charges which were 22% lower than last year; cutting the travel budget by 42%; and rationalising routes to achieve efficiencies in transport costs which were trimmed by 13%.
Buick told the committee that revenue growth from both normal mail and financial services was expected to be 3% while logistics revenue would fall 12% and interest income 29%.
Buick said the Post Office was budgeting for revenue growth of 7% in the 2010- 11 year and a 19% growth in net profit to R297m.
The volume of mail was expected to expand by 1,3%. Post Bank was forecasting a growth in its depositors’ book of R400m.
It is preparing for the termination of its government subsidy in the 2012- 13 year when it becomes self-sufficient and will generate sufficient cash from its own operations to make up the shortfall.
The Post Office received a subsidy of R336m this year to fund its infrastructure programmes and to fulfil its universal service obligations.