South Africa’s oldest institution collapsing in front of everyone’s eyes

The South African Post Office (SAPO) is in dire straits. The state-owned company’s latest results reveal an operating loss of R2.17 billion in 2024.

SAPO traces its history to 2 March 1792, when acting Cape governor Johan Isaac Rhenius formally opened the first post office in South Africa.

It recently presented its annual results for the 2023/24 financial year to the Portfolio Committee on Communication.

These results included a report from the SAPO’s business rescue practitioners (BRPs), outlining the progress made in the business rescue process.

The Post Office was placed under provisional liquidation in February 2023, and a few months later, Anoosh Rooplal and Juanito Damons were appointed as the SAPO’s joint BRPs. Most creditors adopted their Business Rescue Plan on 7 December 2023.

The SAPO’s provisional liquidation order has since been set aside, and the BRPs have assumed the responsibility of the Post Office’s Board of Directors and the Accounting Authority.

The BRPs’ plan identified several key drivers to achieving a successful and sustainable turnaround, including closing multiple branches and significantly reducing the Post Office’s workforce.

In April and May 2024, the Post Office retrenched 4,342 employees as part of its ongoing Business Rescue Process.

In addition, its branch network was rationalised, with 366 Post Office branches permanently closed, leaving 657 branches.

The Post Office also received a R2.4 billion funding allocation from the fiscus in 2023/24 financial year, which has supported its current operations, partial payment of retrenchment costs and payment of creditors.

However, in their presentation to the Portfolio Committee, the BRPs explained that, to implement the approved Business Rescue Plan fully, the Post Office requires a further R3.8 billion in funding.

Looking at the SAPO’s financial results for the year ending 31 March 2025, it becomes clear why this extra funding may be needed.

Weak results and missed targets

The Post Office reported revenue of R1.6 billion, 30% lower than the comparative period. This was attributed to a decline in postal service, parcel, and financial services revenue for the year.

Positively, the state-owned company’s total operating expenses declined in the period, with the SAPO reporting R4.8 billion in operating costs, 8% lower than the prior year. This is due to a reduction in staff costs and transport costs.

Surprisingly, despite its significant decline in revenue, the SAPO reported a net profit of R5.30 billion, a significant swing from the R2.12 billion net loss it recorded the previous year.

The Post Office also returned to solvency in this period, having been technically insolvent in the two years prior. Now, its assets outweigh its liabilities, and the SAPO’s equity is positive.

However, the company also reported having made an operating loss of R2.17 billion for the year, a slight improvement from the R2.19 billion operating loss seen the year prior.

In addition to this weak financial performance, the SAPO also missed many of its annual performance targets in the year ended 31 March 2025.

For example, the SAPO was tasked with growing its logistics revenue by 16%, generating R1 million in warehousing revenue, and establishing an eCommerce mall to support small business development. The SAPO did not achieve any of these targets.

Other key performance indicators (KPIs) included resolving customer complaints recorded at the call centre within seven days and achieving the regulated mail delivery standard. These targets were also missed.

The SAPO only achieved two of its 15 KPIs: attaining a net loss of R2.07 billion (which would have been a more minor loss than the previous year) and regularly monitoring and reporting on its turnaround strategy.

Therefore, the Post Office scored 13% in its annual performance report.

This article was first published by Daily Investor and is republished with permission.