SA Post Office suffers R1 billion operating loss
The DA says that the South African Post Office (SAPO) Annual Report for the year ended 28 February 2015 has finally been tabled before Parliament – eight months late.
According to the political party, the report reveals a record R1.45 billion loss – extended by 260% over the previous year.
The 2015 Annual Report showed the following:
- An operating loss of R994 million (extended by 69%);
- Fruitless and wasteful expenditure of R95 million;
- Irregular expenditure R576 million;
- Only 14% of Annual Performance Indicators achieved;
- 67% of performance targets could not be measured
The DA said that total assets have declined by 13% to R9.859 billion, with current liabilities increasing by 7% to R7.39 billion.
“But when the PostBank’s assets of R6.9 billion are stripped out of the balance sheet, the true picture emerges – that of an entity that is hopelessly insolvent,” said Cameron MacKenzie, DA Shadow Deputy Minister of Telecommunications and Postal Services.
MacKenzie said that following the forced resignation of the previous board in November 2014, appointed SAPO Administrator Dr Simo Lushaba projected a R1.2 billion loss for the 2014/2015 financial year.
“That the actual loss is 20% greater suggests the turnaround plan is not only flawed, it is unachievable,” he said.
With debt of nearly R1 billion, new CEO at SAPO, Mark Barnes, has asked Treasury for a a bailout of between R2.5 billion and R3.5 billion to fund its turnaround, Business Day reported.
“Bailouts of state-owned entities will merely accelerate a ratings downgrade for South Africa. It is a price too high to pay for rescuing a grossly mismanaged SAPO, whose catastrophic leadership was appointed, tolerated and supported by government for years,” said MacKenzie.
He said that in line with the recommendations of the Presidential Review Commission on State-owned Entities, SAPO must be recapitalised by immediately investigating the sale of PostBank to the private sector, with government retaining a golden share.
“This will provide the funds necessary to turn the entity around and place it on a sound financial footing without negatively impacting the country fiscus.”
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