An Post has reported higher revenues for 2020 as strong parcel growth of 100% was partially offset by a decline in letter volumes of 7% and lower trading in its network due to Covid-19 restrictions.
An Post said its revenue for the year rose by 2.6% to €916m from €892m in 2019.
It also reported a €33m profit before depreciation, amortisation, transformation costs, one-off items, net finance income and taxation.
It said this reflected a strong trading performance, driven by the surge in e-commerce parcels, strong Christmas mail and growth in new financial services.
But after depreciation and amortisation the business reported a loss of €10m for the year.
The company had reported a 147% jump in pre-tax profits from €26.8m to €66.3m in 2019, boosted by the sale of the One4all Gift Voucher Shop business to Blackhawk Network.
An Post said the Covid pandemic last year adversely impacted results by over €50m, due to PPE costs, replacement staff costs, reduced post office transactions and a postponed price increase.
But it added that it has seen a very strong start to 2021 with revenues for the first three months of the year up 11% compared to the same time last year.
This was due to continued high parcel volumes and a recovery in letter volumes.
It said it expects parcels will account for 25% of their overall business this year.
Since lockdown lifted and shops reopened, it has seen a 20% drop off in parcels - which it said was expected.
It anticipates this will plateau at that level this year, with 15% growth expected in 2022 and 2023, and 10% growth for the year after.
As the business normalises and the price increase is reinstated, profits are expected to return to pre-pandemic levels, An Post added.
The price of a postage stamp for a standard letter increased by 10 cent to €1.10 at the end of May - the first increase in the price of a standard stamp in more than four years.
The price of a standard international letter also rose to €2 from €1.70.
An Post's chief executive David McRedmond said that 2020 for the company was all about being a public service.
"Unlike many postal services in Europe we kept both our networks fully operational throughout the pandemic," Mr McRedmond said.
"While the costs from Covid were a major hit on the organisation, An Post's strong financial recovery in the previous few years meant the costs could be fully funded from our balance sheet," the CEO stated.
"The revenue growth showed continuing momentum in An Post's strategy which has accelerated even further in the first quarter of 2021. We have ambitious plans, and the momentum, to grow the business as an essential infrastructure for Ireland," he added.
An Post said it met the massive surge in eCommerce by installing its second parcel automation operations at its Dublin Parcel Hub to handle up to 200,000 parcels a day at peak.
It said this €20m investment was designed to meet capacity up to 2024 but as these numbers were reached by Christmas 2020, it is now designing further capacity.
In addition to its An Post Money and State Savings products, An Post partners with AIB and Ulster Bank to offer community banking services through its network.
During 2021, it also plans to expand withdrawal and lodgement services to include Bank of Ireland customers.
An Post today also announced its "Green Light Programme" investment plan for the next five years from 2021 to 2026.
The Green Light Programme will see an investment of €200-300m in the An Post network over the next five years in its physical and digital infrastructure.
An Post has said it plans to offer a new mortgage product to customers in the first half of next year.
With the news that Ulster Bank and KBC are pulling out of the Irish market, David McRedmond, CEO of An Post said there will never be a better opportunity for it to extend a foothold in banking and financial services.
"We are accelerating our plans quite sharply," Mr McRedmond said.
An Post does not have a banking license, but said its strategy in terms of financial services is one of partnership.
Debbie Byrne, Managing Director at An Post, said over the past two years they have had "very advanced" and "serious" discussions with five partners in terms of mortgage offerings.
"If we are going to bring a product to the market we need to bring something different, we need to bring something that would bring value for money," she said.
Ms Byrne said they are at advanced stages with one partner.
"It looks interesting, but a deal is never done until it is done," she said.
Meanwhile, An Post said it has "big ambitions" in the area of SME lending.
Ms Byrne said the exit of Ulster Bank and KBC in this space offers "real opportunity".
"It is an area where we can meet customer demands," she said.
"Covid interrupted that, but it is a space that we are actively looking at," she added.
