An Post will shortly apply for a 14.5 per cent rise in the price of a stamp in an attempt to cut crippling losses at the company.

0Chief executive Mr Donal Curtin said the company would submit the application to regulator ComReg in early summer. He said a rise from 48 to 55 cents was "realistic". He was speaking as the company announced an operating loss of €43 million for 2003.

Mr Curtin admitted the company remained on a "financial knife-edge" and an operating loss of €30 million was forecast for 2004. He hoped it would break even in 2005 and return to an acceptable level of profitability by 2006.

He acknowledged that traditional mail volumes were falling sharply and said 2003 was one of the worst years in a decade for mail volumes. He said the recent dispute involving mail sorting would cost the company €6 million.

The company's annual report reveals that overall company staff increased in 2003, despite a commitment to significantly reduce the size of the workforce. Total group employees rose from 10,241 to 10,444 in 2003. Payroll costs in 2003 totalled € 501 million, an increase of 4.5 per cent on the previous year.

However, a company spokesman explained that a recruitment freeze had only been imposed in the latter half of the year and had not taken its full effect.

He pointed out that since it had been imposed, about 335 people had left the company through natural wastage.

Mr Curtin said talks were ongoing with unions about workplace changes that could lead to the 1,450 redundancies. He said he believed a positive outcome was possible.

The company's chairman, Ms Margaret McGinley, said the rescue plan for An Post was predicated on an agenda for "radical change".

"That includes new arrangements for the collection and delivery of mail, staff reductions and achieving savings," she said.

Mr Curtin said slowing growth in mail volumes, continuing problems at parcel service SDS and a failure to deliver on previously agreed savings plans were behind poor 2003 results. He said some way had to be found to improve the performance at SDS.

He said action had been taken at SDS: 114 jobs had been shed and An Post had exited unprofitable parts of the SDS service, where a new owner/driver system had been introduced. But he refused to be drawn on whether the division should be sold.

Mr Curtin said An Post needed to focus on its core operations and get out of areas like TV-licence collection. Property disposals would also needed for the next four years, he suggested.

He said the company remained concerned about the cost implications of delivering mail directly to every house in the State.

But he said the plan to use a network of roadside boxes was no longer being actively pursued.

He added that "garden gate boxes" were a "sensible" , cost-efficient and non-contentious option. "I have one myself," he said.