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Czech Post cut its losses in 2023 by approx. 1bn, while revealing new Balikovna plans

Translated by Milo Dvorak

15. 4. 2024

Business Newsletter #25

Published by on 9 April 2024.

newsletter 25
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Last year, the state-owned enterprise reported a loss of 756 million Czech crowns. It faces further changes, as Balikovna, currently working on new features, will become an independent entity.

Czech Post was busy last year, closing three hundred branches and eliminating over two and a half thousand full-time job positions, in an effort to save money. According to the director Miroslav Štěpán, by streamlining operations, it reduced its losses by nearly a billion crowns last year. The separation of Balikovna as an independent company, scheduled to take place at the beginning of 2025, is already underway. This year, under Czech Post, it will open fifteen-hundred collection boxes and start offering shared residential and private boxes for doorstep parcel delivery. This week, the Post has also announced a new tender for its headquarters in the centre of Prague.

According to Štěpán, Czech Post incurred a loss of 756 million Czech crowns last year. However, it had lost even more the previous year, specifically 1.75 billion. Operating revenues, including income from asset sales, increased by just under one percent to slightly over 19 billion crowns. And operating costs excluding depreciation decreased by 3.2 percent to 19.1 billion crowns.

This year, the company also anticipates a further reduction in losses to 130 million crowns. By 2026 at the latest, according to Štěpán, it should be profitable and without Balikovna. In the future, for example, it also wants to enable sending and receiving payments to the accounts of clients from all Czech banks. Currently, it only offers such a service for customers of ČSOB, with whom it has a contract until the end of 2027.

"We are achieving these results thanks to stabilisation measures. I am also pleased with the agreement we have with the government and generally the discussion around Czech Post is in a better atmosphere than last year," said the man who has been leading the post since the beginning of last year. Last year, as part of cost-cutting measures, the post closed three hundred branches, laid off thirteen-hundred employees, and in total closed down or reduced 2,530 full-time job positions.

However, major changes are coming at the beginning of 2025. Czech Post is to become two separate entities: the state enterprise Czech Post for public services, such as pension delivery, from which Balikovna for commercial parcel transport directly to customers or to collection boxes will be separated. According to Štěpán, it should take the form of a joint-stock company. The transformation, approved by the government last year, is according to him on schedule and should be completed within twelve months.

According to Štěpán, one of the reasons for the planned change is that the funding Czech Post receives from the state for its operations (up to 1.5 billion crowns annually) does not cover its costs. Additionally, the market for parcel delivery in the Czech Republic is quite competitive, meaning it makes sense to consider bringing in a strategic partner for Balikovna, says Štěpán. The project needs investments that Czech Post currently lacks.

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