South African Post Office Faces R2.17 Billion Loss Amid Business Rescue Efforts
The South African Post Office (SAPO), one of the country’s oldest institutions, is facing severe financial challenges, reporting an operating loss of R2.17 billion in 2024. Established in 1792, the state-owned entity recently presented its annual results to the Portfolio Committee on Communication, revealing a dire financial situation despite ongoing business rescue efforts.
Business Rescue Plan and Workforce Reduction
After being placed under provisional liquidation in February 2023, SAPO appointed business rescue practitioners (BRPs) Anoosh Rooplal and Juanito Damons. Their turnaround strategy included closing 366 branches and retrenching 4,342 employees in early 2024, reducing the workforce significantly.
While the Post Office received a R2.4 billion government bailout in the 2023/24 financial year, the BRPs estimate an additional R3.8 billion is needed to fully implement the rescue plan.
Financial Performance: Mixed Results
Key financial highlights include:
- Revenue decline: 30% drop to R1.6 billion due to reduced postal, parcel, and financial services income
- Operating costs: 8% reduction to R4.8 billion through staff and transport cuts
- Net profit: R5.30 billion (up from R2.12 billion loss in prior year)
- Operating loss: R2.17 billion (slight improvement from R2.19 billion)
Missed Targets Raise Concerns
SAPO failed to meet 13 of its 15 key performance indicators, achieving only:
- Reducing net loss to R2.07 billion
- Regular monitoring of turnaround strategy
Notable failures include missed logistics revenue growth targets, unresolved customer complaints, and failure to establish an eCommerce mall for small businesses.
This article was first published by Daily Investor and is republished with permission. Original source: MyBroadband