Pos Indonesia braces for Rp100b in losses
The Jakarta Post, Jakarta
State postal service, PT Pos Indonesia, will likely close its books in the red this year, as rising operational costs -- and a recent trend of more people turning to electronic means for their communication needs -- are taking their toll on business.
Pos Indonesia president director Hana Suryana was quoted by state news agency Antara as saying on Friday that the company may suffer losses of up to Rp 100 billion (9.91 million), due to the Oct. 1 fuel price hike, which has increased its transportation costs and its procurement expenses for postal supplies.
"We are still assessing the situation. Due to the unfavorable circumstances, it is unlikely that we can make a profit this year," he said.
This year's outlook of losses may become another financial turning point for Pos Indonesia, albeit in an unfavorable way, as the company had actually managed to book an after-tax profit of Rp 1 billion in 2004, from a loss of Rp 20.38 billion the previous year.
Ironically, Hana had previously mentioned how Pos Indonesia managed to reap a slight profit of some 10 percent from the Rp 15.5 billion in total funding allocated for the government's direct cash scheme to offset the fuel price increases for low- income families.
The government had assigned Pos Indonesia to disburse the cash aid of Rp 100,000 per month for each family through its 3,914 post offices throughout the country.
Besides rising transportation and procurement costs, Hana also pointed to the company's increasing costs of paying its workers.
"Our main problem is our huge fixed cost in the form of salaries," he said. "We have to set aside some Rp 1.3 trillion alone for employee salaries, and that does not include their yearly bonuses."
Pos Indonesia currently employs some 26,000 workers and has some 15,000 retirees receiving pensions.
Hana also mentioned that the losses might come from the fact that Pos Indonesia's revenues from postal delivery have lately been in decline.
"Individual postal delivery has decreased by almost 30 percent," he said. "The ratio between postal delivery of corporations and individuals is now 75:25, from 60:40 previously."
Postal services worldwide have taken a severe blow due largely to the rise in electronic communications -- particularly, cellular phones and the Internet.
Even the ongoing celebration of Idul Fitri in Indonesia has failed to help the post office. More people now prefer to send holiday greetings, including Christmas and New Year's cards, via SMS and e-mail, rather than the traditional method of sending cards.
Pos Indonesia's postal service, meanwhile, has also been laboring amid fierce competition from both local and foreign private package delivery firms, with more and more opening businesses in the country.
Hana, however, remained upbeat that his firm would be able to keep this year's losses down, through cost-cutting and efficiency-improving measures, which include management restructuring, renewing the company's postal equipment and venturing into new business areas.
One possibility is the lucrative business of salary payment services, citing the company's competitive edge of being present in nearly every corner of the country.
"One of our focuses in the future is the logistical delivery business, particularly nationwide salary payment services," he said.