SA Post Office CEO Maanda Manyatshe told the parliamentary communications committee Tuesday that although previous predictions that the State owned company would report a profit had not panned out, he expected it to break even in 2003/04 and record operating profits thereafter.
He told MPs on the National Assembly multi-party communications committee led by chairperson Nkenke Kekana that he expected an operating loss in the region of R215-million for the 2002/03 financial year, which was down from R371-million in the previous year and 584 million rand in the year prior to that.
Noting that the post office had the obligation to service the public – especially the poor – while also fighting to make a profit, he said that SAPO’s extensive mail processing network handled six million letters a day. The post office gained income on each letter of R1,23 and it cost R1,35 to get the letter to its destination during the 2001/02 financial year. This was a loss of 12 cents on each letter.
This constituted a subsidy on letter to the tune of more than 170 million rand a year.
He said a standard letter would cost 1.48 rand to get to its destination in 2003/04 while total income was expected to be R1,40 per letter — the loss being just eight cents on each letter.
Manyatshe said the post office had the largest retail network in southern Africa with 2,588 postal outlets and 6,500 counters.
He also noted that the PostBank, a division of SAPO, had a total of R2,3-million account holders with a savings portfolio of about R1,4-billion — but 50% of these had deposits of R50 or less. It cost R30 a month to service each account.
“Accounts of R50 or less will only service themselves for a single month and the remaining 11 months are subsidised by the post office to the tune of R396-million — or R1,2-million accounts times R30 times 11 months.”
Manyatshe noted that PostBank was in competition with SBSA, Absa, First Rand, Nedcor and Investec in addition to about 70 foreign banks operating locally. Nevertheless about 60% of the population “are unbanked” and only 30% of the black population has a bank account.
Change was being driven by technology where the post office suffered much competition from emails, the Internet and cell phones. “There is a migration from sending hard copy messages to SMS messages.”
Nevertheless, the SAPO had notched up key achievements including the reduction of staff from 26 000 to 18 380 between 2000 and 2003.
Manyatshe detailed a number of “turnaround projects” including providing email for life to South Africans “ensuring that customers will use the Post Office as a means of electronic communication”, the corporation of Post Bank into an independent entity and focusing on electronic bill payment. – I-Net Bridge