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This was achieved on the back of a 7% rise in revenue from R5.2bn in 2007 to R5.6bn in the year under review.
Group CEO Motshoanetsi Lefoka attributed the performance to a solid operational year becaked by outstanding financial strength. She said the company had emerged from five tough years of battling bureaucracy, inefficiencies and poor cost control to emerge as a company worthy of its place in the global postal industry.
Of particular note was the group's ability to manage its expenses, which grew at an inflation beating 7%. This has resulted in the South African Post Office achieving a profit margin of just over 10%.
Total assets grew by 10% from R7bn to R7.7bn while cash and investments on the balance sheet showed an increase of 17.4% from R4.6bn to R5.4bn.
Lefoka said this sound financial platform was a key driver in the Post Office's mandate and mission to efficiently connect with the world by distributing information, goods and financial and government services.
She said that the group's shareholder had agreed to continue providing a subsidy to the Sapo of R372m for the coming year. This will be increased to R383m in 2010.
This subsidy is primarily used to assist with the necessary operational and capital expenditure required to service areas that are not commercially viable in South Africa, yet do require services as mandated by the shareholder in terms of its licence and agreed upon by Sapo as part of its Universal Service Obligations.
The group has now been structured into five divisions: Mail, Logistics, Financial Services, ICT and Property.
With a serviceable landscape of 1.2 million square kilometres - a size greater than Austria, Belgium, France, Germany, Luxembourg, the Netherlands and Switzerland combined.
Sapo is one of the broadest operators in the South African business landscape, responsible for over 2 500 outlets, 5 500 service points and employing over 16 000 people, who are responsible for delivering over 6m mail items each day, with a service delivery of approximately 93%.
Millions of new addresses
Among the highlights, Lefoka referred to the roll-out of nearly 5.7m new addresses in the past three years, more than two-thirds of these in rural areas. This means that an additional 1/8 of the South African population can now receive mail and are able to become FICA compliant, a key pre- requisite to individuals being able to achieve financial independence.
With this in mind, Lefoka pointed to the strong performance of Postbank, the financial services division of the group, and which accounts for some 8% of group revenues.
Looking back over the past six years Postbank has seen depositors' funds more than double from R1.2bn to nearly R2.9bn, also showing a healthy 11% increase in depositors' funds from the R2.6bn in 2006/7 to R2.9bn in 2007/8.
She said it was the SA Post Office's vision to ensure that Postbank would become a separate company within three years, while further financial services offerings were being lined up to enhance the offering to the Postbank's 4.6m clients.
Postbank is one of the most widely used service points for Mzansi accounts, with some 2m accounts 40% market share - opened since the Mzansi initiative was launched.
However, Lefoka did not shy away from addressing challenges the group still has to tackle, as it continues in its strive for service excellence.
She acknowledged that there was still some scepticism with regards to Sapo's image driven largely by mail security as highlighted by the Amazon.com case. Lefoka affirmed that a top priority for the Post Office going forward was to address the issue of mail crime.
"I am committed to reducing mail crime," she says. "One letter undelivered is one letter too many. We will make strides by upping our investment in security infrastructure - we have set aside R50m towards this in the next financial year - and we are actively engaging our workforce to work with us to stamp out mail crime."
Regaining trust of the public
She was confident that the stable financial platform and the heavy capital expenditure in processes, systems and surveillance would lead to a further improvement in mail delivery, thus ensuring the regaining of the trust of the public.
"We are achieving a 93% delivery rate on mail items. Our goal over the next 12 months is to improve this to 95%. We are also in the process of introducing a new postal coding system that will improve the accuracy of delivery.
"Within three years of its roll out, we anticipate that our mail delivery success rate will grow to 98%."
- I-Net Bridge
