The South African Post Office (Sapo) on Monday received a much needed R650 million equity injection as the state owned entity continues to struggle to stay afloat.<\/p>\n
Recently appointed chief executive, Mark Barnes, told the Parliament’s Portfolio Committee on Telecommunications and Postal Services on Friday that the company still needs further funds.<\/p>\n
\u201cI need to make it clear that if we do not get the full R2.5 billion, we cannot leave the harbour,” he said.<\/p>\n
Barnes said that the company has had the term of its R2.7 billion guarantee extended by Treasury, but needs more money to to settle outstanding debt of R884 million.<\/p>\n
He said that the parastatal is chalking up monthly losses of approximately R125 million, and despite claims that the company aims to be profitable in 2018, it is expected to record a loss of more than R1 billion in the 2015\/16 financial year.<\/p>\n
In the previous financial year it lost R1.5 billion, while the company forecasts a billion rand loss in 2017.<\/p>\n
Business Day<\/a> reported that as part of a turnaround strategy, Sapo will be forced into retrenching some of its 21,000 employees. The entity has already closed down approximately 25 of its 1,500 branches.<\/p>\n Barnes said costs represented 78% of revenue, which the company hopes to reduce to 40%, through cost cutting measures, and by increasing revenue.<\/p>\n A former banker, Barnes has said that Sapo is also in-line for a full banking licence which would enable the company to offer financial services products such as lending.<\/p>\n We\u2019re an outdated organisation: SA Post Office CEO<\/strong><\/a><\/p>\n SA Post Office suffers R1 billion operating loss<\/a><\/strong><\/p>\n SA Post Office expects R1.3 billion loss<\/a><\/strong><\/p>\nMore on the Post Office<\/h3>\n