Minister: Lossmaking national mail carrier in need of changes
According to Minister of Regional Affairs Hendrik Terras, the recent financial results of the state-owned postal company Omniva, also known as Eesti Post, have fallen short of expectations and the situation must change. However, five-day home delivery of mail should remain in place for residents.
By the end of April, Omniva released its financial results for the first quarter, showing a profit of €3.2 million. However, this was primarily due to the sale of its historic headquarters in Tallinn. Without this one-time income, the company would have posted a €2 million loss — just as it did a year earlier.
The company acknowledged that the results clearly fell short of management's expectations. Although the number of parcels delivered and sales revenue grew significantly, losses from mail and periodicals delivery, along with faster-than-expected increases in operating costs, demand swift changes to avoid further losses.
Minister of Regional Affairs Hendrik Terras (Eesti 200) also believes the company needs quick and decisive reforms.
"As the owner's representative, we are in constant dialogue with Omniva's management to find solutions for improving the company's efficiency and ensuring its sustainability. This includes cost-cutting measures, such as reducing the number of office staff and a review of the logistics and postal network structure," he told ERR.
"As for privatizing Omniva or taking it public, my position is clear: as long as the company's financial indicators haven't improved and it cannot sustainably turn a profit, there's no point in discussing such options," Terras said.
Former Eesti Post CEO Mart Mägi has suggested that, in order to cut costs, home mail delivery could be reduced from five days a week to three. The minister does not support this idea.
"That should be an absolute last resort. I believe there are far more options available that we can explore first. If the state truly has no other choice, then it might be discussed, although I consider that very unlikely," Terras said.
So, how can the company be made profitable?
Terras said there are several potential solutions, including changes to the Postal Act and pricing adjustments.
"There are also future prospects tied to how investments outside Estonia perform — what we're doing in foreign markets and whether those operations are being managed appropriately. There are many such questions on the table, many focal points. The main goal is that Omniva becomes sustainable and capable of turning a profit — even if it's just one euro," said Terras.
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Editor: Marcus Turovski
