The financial state of Latvian Post is currently extremely precarious, said the company’s board chairperson Beāte Krauze-Čebotare in an interview to Latvijas Radio on Tuesday, the 30th of January.
She explained the revenue of the company are down. The transit flow is down as well, which was one of the main sources of income for Latvian Post. There is also the issue of universal postal services going down every year. This includes postal correspondence and subscriptions to various printed media.
At the same time, there is pressure to increase workers’ wages.
Krauze-Čebotare also said Latvian Post is not a state institution – it is a state-owned company. This means it does not have to provide social functions, rather it needs to operate with profits or, at the very least, operate without losses.
“It’s not possible to lower the number of fixed assets or the number of employees in proportion to the decrease in the number of press subscriptions and letters. This is why Latvian Post has ended up in a difficult financial situation, because without reforming offices and preserving them, Latvian Post is forced to operate with losses. This means we will have to ask the Latvian state and government to be provided with additional financing,” said Krauze-Čebotare.
She also mentioned it would be too far to say Latvian Post is on the brink of insolvency. Nevertheless, if no solution is found, it will be a matter of two or three years.
“If we don’t act soon and take various measures to improve economic operations of Latvian Postal Service, in two or three years from now we will be faced with a very difficult situation,” Krauze-Čebotare warned.
Latvian Minister of Transport Kaspars Briškens told TV3 programme 900 seconds on Tuesday that until now there was no full strategic communication with all involved sides in regards to the plans to close branches of the Latvian Post.
“The postal service does not have solely a capitalistic function – maximising profits. The postal service also plays an important social function that involves uninterrupted provision of services,” said Briškens, adding that the company needs to modernise services and implement a business approach as well, but it cannot be done at the expense of critical functions.
In 2022 Latvian Post operated with turnover of EUR 100 009, which is 5.1% less when compared to 2021. The company also operated with profits of EUR 2.21 million as opposed to losses a year prior.
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