Czech Post Forecasts Reduced Operational Loss for 2023, Implementing Cost-Cutting Measures

The Czech Post is expecting a reduced operational loss of approximately 310 million Czech crowns for the current year, representing a significant improvement compared to last year’s earnings before interest, taxes, depreciation, and amortization (EBITDA) drop. This anticipated loss is substantially lower than the previously forecasted 1.5 billion Czech crowns, which included income from the sale of the main post office building in Jindřišská Street, a transaction that is now set to be completed in the following year. Miroslav Štěpán, the newly appointed Deputy General Director, disclosed this information during a seminar on postal transformation held in the Chamber of Deputies.

In a bid to mitigate the losses for this year and the next and to stabilize its operations, the Czech Post has been implementing a series of measures. These include the closure of 300 branches in mid-year, workforce reductions, property sales, and extending delivery times. The cumulative impact of these measures for the current and upcoming year is estimated at 4.3 billion Czech crowns.

“We continue with crisis management, ensuring the operational management of the Czech Post for 2023 and 2024. The Czech Post is not facing the threat of bankruptcy,” emphasized Štěpán.

In the coming year, members of the Chamber of Deputies are expected to approve a transformation law that will separate the parcel locker into an independent joint-stock company. The state enterprise Czech Post will retain its branch network to provide state services. Payments for these services will no longer be restricted to 1.5 billion Czech crowns but will be made quarterly. In 2025, the Czech Telecommunication Office (ČTÚ) is set to grant a new postal license, with the post office anticipating positive operations in 2025 and 2026.

As part of the transformation efforts, a functional mechanism will be established to secure funds from external state or private sources, supporting the transformation process and the development of postal activities. The Czech Post will also continue converting branches into Partner Posts in the upcoming year, with the operation of these branches to be assumed by other entities. Plans call for the conversion of 150 to 180 units, augmenting the current count of more than 800 Partner Posts out of a total of 2,900 branches.

Article by Prague Forum

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