State plans to restructure Romanian Post and turn it profitable again in 2014

The state-owned Romanian Post will undergo a restructuring process to avoid going bankrupt, according to a recent strategy quoted by newswire Mediafax. The process will include a reduction of the Post's staff, the development of its portfolio of financial services, faster local deliveries, as well as rewards for the postal workers, who will become a direct sales force for the company. The Romanian Post has witnessed a deterioration of its financial situation starting 2008, when it started losing money, in yearly increasing costs. The company, which had a gross profit of RON 34.3 million in 2007 (around EUR 8.1 million at today's rate), had a loss of RON 150 million last year (the equivalent of EUR 35.7 million at today's rate). The restructuring document quoted by Mediafax mentions the imminence of a higher loss in 2010, expected to reach RON 250 million (around EUR 59.5 million). One of the main reasons having led to the current situation is a EUR 300 million acquisition contract in 2008, which exceeded the company's financial capacity. A staff increase, the lack of an integrated IT system and the inefficient management of large clients have also contributed to the current financial situation. The strategy also includes the exclusive rights to deliver small parcels, under 50g and which cost up to RON 2. The company will also require investments of around EUR 113 million, out of which EUR 70 million in automated sorting centers, EUR 10 for integrated IT systems and EUR 12.5 million for printing systems. The rest will go to reorganizing its transport fleet and expanding its virtual private network. The Government believes the Romanian Post can become financial stable in 2014, when it could reach a gross profit of around RON 50 million (around EUR 11.9 million at today's rate).