“This is a prolonged privatization attempt, not a failure of last year’s attempt,” said Alexandru Petrescu, president of the privatization commission and the company’s general manager for the past four months.
While in 2013 Posta was overstuffed (around 33,000 employees), had massive debts to the Romanian tax authority ANAF and had not undergone any restructuring, now “we’re coming up with a more appealing offer for investors (…) we are poised to attract strategic investors, are standing a real chance of achieving a successful privatization,” said Petrescu.
Last year, before the deadline for non-binding bid submission, 50 companies were said to be interested in the company. However, none of these bought the task book after that stage. Considering the challenging situation of the postal operator, which constantly piled up losses in the 2009-2013 period, any other failed attempt could destabilize the company, analysts warned last year.
“We made 5,000 employees redundant last year (16% of total headcount) and now we started the conversion of debt to ANAF. By October, the 169 million lei (EUR38 million) in debt will be erased,” said Petrescu.
Last year, potential investors voiced their concern about the company’s high number of employees and debt, but these issues have now been solved, added Petrescu. “I am confident that in the wake of the meetings we’ve had, at least one company will materialize its intention of submitting a bid. By the end of the first quarter I want to be able to say this process is completed and start again on new foundations”.
Last week, Petrescu met the president of La Poste, of bpost (Belgian postal operator), Royal Mai (Great Britain) officials, the heads of postal operators of the Netherlands and Poland. These operators could be a model for the Romanian company as regards the growth strategy.
In the wake of reshuffling moves, Posta Romana generate gross profit of RON20.4 million (EUR4.6 million) in the first seven months of this year, against losses of around RON25 million (EUR5.6 million) in the year earlier period. “Profit came amid a tighter control of expenses, which slid by 10% against last year. We expect a strong rebound in revenue toward yearend and early 1Q, 2015, on the contracts signed in recent months, with the national health insurance house CNAS and a cosmetics distributor.
Moreover, the company opened a postal office in a franchise system in partnership with a shopping center and an office in Gara de Nord.
The company also entered the insurance market, after Posta Romana Broker de Asigurari got the operating license from financial watchdog ASF.
Posta in early 2014 started an agency revamping program, with just seven agencies modernized so far. The company head says he does not plan to open new agencies and will focus on opening agencies in a franchise system.
The company has earmarked EUR13.5 million for IT infrastructure modernization. “We want to renew IT architecture and then consider financial-banking services, e-commerce”.
In the first seven months, letter delivery generated RON252 million, down 13% from 2013, pension delivery brought RON225 million, 4.5% less, while parcel delivery generated RON19.6 million, up 4%. “Parcel delivery services have growth potential, this is a niche able to lift the company’s revenue, we’re mulling innovation elements. We will buy 50 cars by yearend for express services. At present, we’re trying to grow on slow delivery considering our competitive logistics and tariffs”.
Posta Romana ended 2013 with revenue of EUR261 million and losses of EUR6.5 million, according to Finance Ministry data.
(English version by Catalina Apostoiu)