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SAPO Financial Overview 30 November 2012

SA Post Office Quarter 3 Performance 31 December 2012. SAPO Financial Overview 30 November 2012. Contents. Overview Economic sustainability Scorecard. Overview. Revenue growth remains a challenge. 872,610 motor vehicle licences renewed during 3 rd quarter.

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SAPO Financial Overview 30 November 2012

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  1. SA Post Office Quarter 3 Performance 31 December 2012 SAPO Financial Overview 30 November 2012

  2. Contents • Overview • Economic sustainability • Scorecard

  3. Overview • Revenue growth remains a challenge. • 872,610 motor vehicle licences renewed during 3rd quarter. • Labour unrest in economy had adverse effect on postal services contributing to delays. • Flexible labour broking staff employed as Post Office casual employees. • Additional 653,696 new addresses rolled out to date. • 13 new points of presence opened and 12 upgraded/relocated. • Mail delivery standard of 89% achieved. • Financial Misconduct Framework is being rolled out.

  4. Economic Sustainability

  5. ECONOMIC SUSTAINABILITY (GROUP FINANCIAL OVERVIEW) • Revenue below budget by R196 million, up 2% from prior year . • Revenue shortfall – Due to customer consolidation of volumes posted, delay in the Licence approval for the Trust Centre and loss of SASSA business. • Expenses below budget by R22 million, up 6% from prior year. • Lower revenues and withdrawal of subsidy for marginal Post Offices contributes to higher net loss position of R173 million.

  6. FINANCIAL SUSTAINABILITY (BUSINESS SEGMENTS) The summary of the third quarter results for the different business segments within the Post Office Group is indicated in the table below.

  7. ECONOMIC SUSTAINABILITY (REVENUE OVERVIEW) • Mail - below budget due to decline in volumes from customer consolidations and the recent labour strike impact. • Digital – below budget due to delay in Licence approval for Trust Centre. • Logistics – decline in customer volumes for courier items. • Postbank – loss of customers and delayed implementation of bank fees. • Financial Services – Loss of SASSA business and decline in third party payments. • Interest – Lower interest rates and cash available for investment. • Sundry – Above budget due to the insurance claim pay-out for the Postbank fraud.

  8. ECONOMIC SUSTAINABILITY (EXPENSES OVERVIEW) • Staff expenses above budget by R16 million due to additional costs incurred during strike action and conversion of casual staff – detail on next slide. • Transport expenses above budget by R42 million due to the increase in line-haul costs for the Transnet brokerage business, increase in airline costs and transport strike. • Material and services below budget due to cost optimization and lower spending during December. • Other expenses below budget due to cost optimization and R20,3 million reversal for the Transman legal case won by SAPO.

  9. ECONOMIC SUSTAINABILITY (EXPENSES OVERVIEW) • R33 million under budget due to critical vacant positions. • R89 million over budget for casuals net-off with R62 million savings from flexible staff costs. • R27 million overspending on casuals and R17 million for overtime relate to additional costs incurred during the strike action.

  10. ECONOMIC SUSTAINABILITY (CAPITAL EXPENDITURE) • Payments of R79 million to suppliers and R141 million is committed for purchase orders issued. • R30 million remains unutilized from the 2012/13 budget allocation. • Decrease in available funding results in the re-prioritisation of key capital programs and the replacement of ageing technology equipment.

  11. ECONOMIC SUSTAINABILITY (CASH FLOW STATEMENT) • Operating activities generated cash of R550 million for the Group. • Increase in cash invested of R510 million. • Financing activities increased by R6 million due to subsidy received and claims made. • Depositors funds increased by R219 million. • Cash and cash equivalents increased by R253 million.

  12. ECONOMIC SUSTAINABILITY (BALANCE SHEET) • Total assets decreased by R180 million for the Group. • Decrease of R319 million in current assets to fund operations. • Decrease in equity resulted from the net loss position. • Current ratio at 1.25 indicating that our liabilities have adequate cover from assets.

  13. ECONOMIC SUSTAINABILITY (DEBTORS) • Bulk mail debtors days exceeded target by 5 due to low debt collections. • Speed days are 11 above target due to late payments from customers. • Agency debtors days are high due to the CPS matter currently in litigation. • Courier days are 3 days over the benchmark due to low debt collections. • Overall collection from debtors are within the target.

  14. Scorecard

  15. Measurement of Economic Performance Indicators

  16. Measurement of non-financial Performance Indicators

  17. Measurement of Social Sustainability Performance Indicators

  18. Measurement of Social Sustainability Performance Indicators (continued)

  19. Measurement of Social Sustainability Performance Indicators (continued)

  20. Measurement of Social Sustainability Performance Indicators (continued)

  21. Measurement of Social Sustainability Performance Indicators (continued)

  22. Measurement of Environmental Sustainability Performance Indicators

  23. Measurement of Environmental Sustainability Performance Indicators

  24. Measurement of Environmental Sustainability Performance Indicators

  25. Summary

  26. End of Presentation

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