Czech Post reported loss of approximately CZK 1.25 billion last year

Czech Post reported a loss of approximately 1.25 billion crowns last year, marking an increase of 500 million crowns compared to the previous year. The primary reason for the deepened loss was the failure to complete the planned sale of the main post office building in Prague, which was expected to generate around 1.4 billion crowns. This was confirmed by Director General Miroslav Štěpán. The company had previously recorded its highest loss of 1.75 billion crowns in 2022, and with a projected deficit exceeding three billion crowns and the looming threat of insolvency, the government was prompted to implement transformation and stabilization measures. The ongoing transformation, expected to conclude in 2026, aims to restore Czech Post to profitability.

“Despite positive changes, we anticipate a negative economic outcome until the transformation process is completed,” Štěpán stated. Czech Post last recorded a positive financial result in 2017. Under the new CEO, who officially took office in January last year, the company has reduced operating costs by three billion crowns. Additionally, pricing policies have been restructured, and contracts with existing customers have been improved, securing an extra billion crowns in revenue.

Efforts to enhance operational efficiency have also yielded results. Between 2018 and 2022, rising wages outpaced labor productivity, negatively impacting the company’s financial health. During that period, average wages grew at an annual rate of 4.6 percent, while productivity increased by only 2.6 percent. However, in 2023 and 2024, productivity saw a significant improvement of 8.1 percent, surpassing the 5.4 percent annual wage increase.

A key element of the transformation strategy involves separating public postal services from commercial parcel operations. To facilitate this shift, Czech Post established a joint-stock company named Balíkov at the start of this year, which will eventually handle parcel and logistics services. Beginning in April, these services will be assigned to Česká pošta - parcel services, serving as an interim step before their full transfer to Balíkov.

During recent parliamentary and senate hearings, Štěpán outlined further measures to balance declining demand with the company’s extensive infrastructure, aiming to strengthen revenue streams. “In practice, this means that, alongside services mandated by its postal license, Czech Post will also utilize its excess capacity for partner services that align with its existing operations,” he explained. This could include consulting services for state administration, municipalities, and public institutions. Some branches are already processing applications for employment office benefits as part of this initiative.

Czech Post, a state-owned company, currently employs around 20,000 people and operates 2,900 branches. In 2023, the company closed 300 of its 3,200 branches as part of its stabilization efforts.

Source: CTK