In early September, the board of An Post advised me that operational losses for this year were expected to be €50.3 million which, after contributions from property disposals and savings, would amount to €31.5 million. In 2004, the company expects to incur operational losses of €39.1 million with net losses estimated at €20.3 million. These figures represent a serious deterioration in the financial position of An Post and are significantly worse than the information supplied to me earlier this year.
My officials and I have on numerous occasions this year expressed disquiet about the An Post financials but were assured by the company that the situation, while difficult, was under control. As a response to the serious financial situation outlined to me last month, I expressed my concerns to the board and asked for confirmation that the losses forecast represent an accurate representation of the An Post group as it currently stands, and an assurance that the cash position of the company is sound for the remainder of the year. I also requested a report outlining how the current financial situation arose, a recovery plan, and monthly meetings with An Post's management team and departmental officials to review progress. Finally, I asked for a review of the financial operations of the company.
Early last week An Post submitted a response to my letter including an outline recovery strategy. In regard to the issues raised in my correspondence, the company has confirmed that the financial position as outlined is an accurate account of the An Post group financials as they currently stand; that the cash position for the company is sound for the rest of this year and that An Post's management will meet monthly with departmental officials. A review of the financial operations has been concluded and key steps are being implemented to improve the quality of financial reporting to the board, and a report on how the current financial problem arose has been provided.
My Department is examining the recovery strategy but the detail of this has to be discussed with unions before it can be finalised. An Post has a statutory obligation to provide a nationwide postal service and to operate a post office network. Therefore, I expect that the recovery strategy would have no significant adverse affect on An Post's customers. As I have already mentioned, the plan is subject to negotiation with unions. An Post signalled staffing reductions amounting to approximately 1,140 early last year but provisional numbers from the outline recovery strategy envisage an advance on this figure.
While the board, management and staff of the company have my full support and assistance, and that of my Department, in dealing with the difficult challenges ahead, the responsibility for designing and implementing the recovery plan ultimately rests with the company.