The financial statements of Israel Postal Company for the second quarter show a rise in revenue, but a sharp drop in net profit. These are probably the last financials to be published by Israel Postal Company, which still operates under the Government Companies Authority, as the process of privatizing it and selling it to the Milgam-Phoenix- Leiman Schlussel consortium, which bought it in May, is completed.
The factor that negatively impacted Israel Post’s second quarter results was the war. Fewer Israelis flew overseas and so converted less currency at Israel Post branches, which is usually a profitable business for the company. The decline in the number of flights to Israel also hit the profitability of the parcels service.
Israel Postal Company was privatized in May and was sold for NIS 461 million, not including debt, to a consortium headed by Milgam, owned by the Weil family, with insurance company The Phoenix and confectionary importer Leiman Schlussel. The company’s second quarter revenue rose 3.5% to NIS 427 million. Revenue of the financial services segment, which includes interest income, rose 6% to NIS 150 million. Revenue from mail and trade services rose by a little over 2.5% in comparison with the corresponding quarter last year.
Operating profit fell by 57% because of a steep drop in other revenue and expenses (net) to NIS 74 million, 47% less than in the corresponding quarter. This was due to one-time provisions for severance pay in the second quarter this year.
Net profit was slashed 68% to NIS 48 million, a figure that can be looked at in two ways. On the one hand, profitability is down; on the other hand, before the aggressive recovery program that cost the state billions of shekels, Israel Post was losing a million shekels a day. The very fact that the company made a profit amounts to a positive final chord as far from the point of view of the state, which will no longer have to inject public money to save it.
After the reporting period, Israel Postal Company paid NIS 300 million of a debt to China Post, with a further NIS 40 million payment due to be made shortly. This will complete the payment of the debt, following a payment of NIS 100 million in 2023.
Israel Postal Company chairperson Mishael Vaknin said, "The results are the fruit of the efforts of thousands of dedicated workers, who have carried out a turnaround which only two years ago was on the brink of insolvency. The revolution at Israel Post shows that things can be done differently, and how vital it is to keep politics out of companies that belong to the public and whose job it is to serve the public."
Published by Globes, Israel business news - en.globes.co.il - on August 29, 2024.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.