SA Post Office to reach profitability in 2018: CEO

Briefing Parliament's portfolio committee on telecommunications and postal services on the SAPO it annual performance and strategic plan, Barnes said they were unlikely to reach profitability this year.

"We are looking to be profitable within two years, so it's the 2018 financial year. We expect to return to monthly profitability for the first time in the third quarter of that year and so it's tight," he said.

SAPO would require around R3.5 billion in funding to help the post office emerge from its current financial dire straits.

About one billion rand of this money would be needed to settle overdue accounts with creditors, some who have not been paid for a year.

"What happens if we don't get the money? Well, we'll keep fighting until we do get the money," Barnes said in response to a questions from an MP.

A strike and poor financial performance crippled the post office in 2014, leading to SAPO being technically insolvent and at one stage not being able to pay staff salaries in full.

Barnes told MPs they were working with staff, through their unions, to ensure staff are paid and that retrenchments don't happen.

"All staff payments are up to date, on borrowed money, but they're up to date," he said.

"The understanding that the unions have about rationalisation is that our first prize is a growth strategy that doesn't require rationalisation, but they're also absolutely clear…that unless we make the revenue targets we cannot continue with the costs. We would be foolish think we can still pay them if the revenue doesn't come back."

The post office brand, which had suffered tremendously over the past two years, would also be a priority, Barnes said.

"It used to be an extraordinary brand of trust. It used to be an extraordinary powerful tool. It's quite the opposite right now," he said.

"We're even looking internally at changing the logo if that's what it takes."

Updating MPs on progress in setting up the Post Bank, Barnes said they were still awaiting approval from the Reserve Bank after it filed an application in terms of the Banks Act.

"People are holding back on being the first person to stand up on behalf of the post office, people throughout our interface, even the Reserve Bank," he said.

"People are not prepared to take that first step to believe the wholesome intensions of the post office."

Transfers from Treasury totalling R379 million had already been made over the past three years towards the establishment of the bank. - ANA