Brendan Howlin (Wexford, Labour)
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Question 39: To ask the Minister for Communications, Marine and Natural Resources his reaction to the recent announcement in An Post's 2004 annual report that the company recorded a pre-tax profit of €7 million for 2004; his views on whether the company is justified in seeking up to 1,500 redundancies in view of such profits; and if he will make a statement on the matter. [19900/05]

Noel Dempsey (Meath, Fianna Fail)
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The financial outturn in 2004 for An Post resulted in operating profits of €1.8 million and an overall profit for the financial year of €6.5 million. This is attributable in large part to a policy of controlled financial management, in line with the recovery strategy that the company implemented throughout 2004 and the non-payment of Sustaining Progress awards and the company's policy of not filling vacancies restricted growth in labour costs in 2004.

The small profit in 2004 reverses the loss-making situation for the years 2001 to 2003 inclusive and represents a significant turnaround from the operational losses of €42.9 million experienced by the company in 2003.

Deputies should note that, while this return to profit is a welcome development, there is no room for complacency and 2004 was a challenging year for all involved in An Post — the board, the management and the employees — and difficult cost cutting decisions had to be made. To attempt to build a brighter future for the company, negotiations under the auspices of the Labour Relations Commission continued throughout the year and although progress has been slow, I believe that with the continued co-operation of all parties, an agreement can be reached that will set the company on a firm financial footing for the future. The importance of the current negotiations coming to a successful conclusion cannot be stressed enough.

Changes in the collection and delivery operations area are critical to addressing the company's precarious financial circumstances. In this regard, An Post is seeking approximately 1,350 voluntary redundancies in collection and delivery together with changes in existing work practices. In particular, there is a need to cut existing overtime levels. The changes will increase operational flexibility and significantly reduce the company's existing cost base. Such changes will enable the company to provide a cost effective mails service and a quality of service standard which meets customer expectations.

The financial results in 2004 have provided a foundation on which the company can build. An Post has a statutory mandate to be financially viable and this needs to be reflected in the planning and actions of the company moving forward.