An Post not in crisis, says CEO, hitting out at 'reckless' report on company's finances
The postal service's annual report was brought to Cabinet by communications minister Patrick O'Donovan yesterday. It showed that, while profits were up, there was an 'inexorable decline' in overall mail numbers.
Profits after exceptional items stood at €5.6m, up from a €20m loss in 2023, on the back of first-ever revenues of €1bn.
'That was simply not true,' Mr McRedmond told RTÉ's Morning Ireland.
'Look, this is utterly irresponsible reporting. It was an irresponsible leak from a government minister, which is wholly unacceptable.
"These are not the actions of a responsible shareholder. The company is doing really well."
Expressing his anger, Mr McRedmond highlighted strong financial results presented to the Cabinet: 'I'm absolutely furious to read something like that.
"They showed the highest revenue we've ever had, over a billion in revenue for the first time.
"They showed that we grew our earnings from €38m to €55 million. They showed our net profit was at €10m.
"The company is performing extremely well. We've got the highest level of parcel growth of any postal operator in Europe.'
While acknowledging the positive impact of last year's elections on revenue, Mr McRedmond said if it had not been the elections, "it would be something else.'
He emphasised that An Post is seeking more cash not because of financial trouble, but due to rapid growth.
'We're growing in commercial parcel markets," he said.
"We get paid on 60 or 90 days' credit. We are constantly growing. So we need more working capital... but this is all coming from a position of strength."
Dismissing claims that An Post's cash reserves had dipped below €1m, Mr McRedmond stated: 'That's untrue. At the end of the year, we have €38m in cash reserves. And this year, so far... we are performing well ahead of our budget.'
He voiced concern for An Post's 10,000 employees and commercial customers.
'They've been so disrespected by this… It's so disrespectful. And the other is our customers... if they read this morning, that An Post is on the brink... It's reckless in the extreme.'
Mr McRedmond also reiterated An Post's commitment to maintaining its post office network.
'We have no plan to close post offices. None.
"We occasionally relocate or we do something. Very occasionally, post offices will close because somebody retires and we can't get somebody to replace them. But the post office network is doing well.
"But quite rightly, postmasters are saying to the government, you want us to do more government services, pay us for them.'
Mr McRedmond concluded by calling for long-overdue policy changes, including lifting An Post's borrowing cap and regulatory flexibility.
'These are normal conversations… coming from a position where the company has had one of its best years.'
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Paul O'Donoghue THE HUMBLE POSTAL service has been a fixture of Irish life for generations. That now seems at risk. A major row last week over the future of An Post grabbed news headlines – including claims and counterclaims over the financial health of the organisation. Around the time when the postal service was due to appear before an Oireachtas committee, the An Post CEO said a minister leaked information from Cabinet. Meanwhile, rumours swirled of an organisation in a bad economic position. Very exciting stuff. But when you look past all the heat and noise, one key point emerged - An Post wants to cut mail delivery days. The details still have to be ironed out. But reports suggest mail would be delivered on fewer days per week as a way of cutting costs. However, this report emerged at the same time as An Post confirmed fairly encouraging numbers for 2024. Last year, sales at the organisation topped €1 billion for the first time ever, up from €922 million in 2023. 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Because of this, there's less mail revenue for An Post. This has been somewhat compensated for by the rise in parcel deliveries from people shopping online, which has boomed since Covid. An Post reported that parcel deliveries jumped by 12.6% in 2024. Which comes back to why An Post wants to cut mail delivery days. It wants to focus more on the side of its operations which is growing and makes more money – parcels. Not the part which is shrinking – letter delivery. Cutting costs The logic of delivering mail on fewer days is to minimise costs. For example – say it costs An Post €500 to send out 1,000 letters in a day (these numbers are pulled out of the air for illustration purposes). If it delivers letters five days a week, it spends €2,500. If it could deliver all those letters in four days instead, it only costs the organisation €2,000. And the same number of letters get delivered. An Post alludes to this in its 2024 annual report, saying customers are 'demanding reliability over speed'. This also means there is logic to An Post's decision to recently raise stamp prices , even as mail volumes fall. Delivering higher-priced mail on fewer days makes more financial sense than delivering lower-priced mail every day. In tandem with this, the organisation will increasingly focus on its growing parcel deliveries. International trend This proposal to reduce delivery days is not unique to An Post. Postal services across the world are looking at similar measures in the face of falling traditional mail volumes. In New Zealand, the state postal service only delivers three times per week to urban areas, and five per week to rural addresses. Last year, New Zealand's government proposed reducing this even further , to two days in urban centres and three in rural areas. Again, to cut costs. The organisation also plans to have parcels and mail delivered by the same person. Denmark has taken things even further again. PostNord, the country's state-run postal service, will cease all letter deliveries by the end of 2025 . The country's Transport Minister not-very-reassuringly reassured people they will still be able to send mail via the 'free market'. Related Reads War of words breaks out on the airwaves between An Post boss and a minister — what's going on? The announcement came in the same week that Germany's Deutsche Post announced it will cut 8,000 of its 187,000 workforce . Why are all these countries doing this? Postal services tend to be state owned. With the fall in mail volumes, the postal services often start making financial losses, even with the growth in parcels. Once losses start mounting, the choice for governments is either to subsidise/invest in the service, or cut it. And many are choosing to cut. Some insight into the numbers was provided earlier this month by the UK's Royal Mail. While the body is privately-owned, it's dealing with the same issues as the state-owned postal services. Ofcom, the UK's postal watchdog, has given it the all-clear to cut mail deliveries for 'second-class' letters to every other weekday and not on Saturdays. It said doing this would reduce Royal Mail's costs by at least £250 million a year – a significant amount for an organisation which only recorded an operating profit of £149 million in 2023. An Post future To bring this back to An Post. The €5.6m profit it made this year might sound good. And it is, for an organisation operating in a very difficult market. But given its sales of €1 billion, An Post has a profit margin of less than 1%. That's a very slender buffer which could easily be erased by any number of economic shocks. Ofcom's figures give some indication of the financial benefit of cutting mail delivery days. So it's easy to see why An Post would want to follow suit. It's also worth noting that a report from Grant Thornton just a few months ago suggested that the post office network needs funding of €15m annually over the next five years , up from its current €10m per year. If it doesn't get it, there are warnings of widespread post office closures. While An Post reported good numbers in 2024, its long-term future is still uncertain. So management wants to put it in as secure a financial position as possible. Now, are the proposed changes good for An Post customers or workers? Probably not. Consumers will get a reduced service, while employees face delivering the same volume of mail on fewer days. But while An Post is publicly owned, it operates as a business. Given that, its proposals are very much in line with global trends. There's an argument that An Post should be run more as community service, delivering mail every day, even if it doesn't make the best business sense. However, that isn't how the company is set up now. Until its operating mandate changes, An Post will aim to run itself in a way that puts it in the most secure financial position possible. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
