An Post has warned the Government that it will have to subsidise post offices if they are to remain open.
As it reported rising revenues but lower operating profits for 2000, its chief executive, Mr John Hynes, yesterday said that the group could no longer shoulder losses on the network.
"We want a sustainable post office network. That will involve a subsidy", he said.
The group also revealed that it had sought an increase in its charges for international mail and will seek a rise in domestic postal rates later this year.
Rural and urban post offices are believed to have lost about £3 million in 2000 and Mr Hynes forecast that the deficit would rise to more than £13 million this year.
An Post believes that only 400 of the 1,900 post offices in the State are viable.
Citing figures from a report by Mr Phil Flynn, an industrial relations consultant, Mr Hynes said that the accumulated loss on the post office network would reach £82 million by 2004. The group was committed to the "sustainable development" of the network, but Mr Hynes said EU regulations would prevent it cross-subsidising the division with profits from the remaining areas of its postal monopoly.
Mr Flynn concluded that the group could not reconcile its necessity to trade effectively with a Government directive prohibiting closures within the post office network.
His report was sent to the Minister for Public Enterprise, Ms O'Rourke, who appointed an inter-departmental working group to draw up a "blueprint" for the business. An Post said it expected that analysis to be delivered later this month.
At the publication of what it described as "modest" financial results for 2000, An Post said returns from its core activities were "increasingly inadequate".
Revenues rose by £27 million to £451 million, but the group's day-to-day profit fell to £7.7 million from £10.5 million. Its profit margin fell to 1.7 per cent from 2.5 per cent, a level described by Mr Hynes last year as "completely inadequate".
An Post's chairman, Mr Stephen O'Connor, said that costs were rising faster than revenues and were "seriously detrimental" to the group's future.
While it has agreed an employee share option plan designed to deliver annual savings of £27 million by 2003, Mr O'Connor said the combined impact of inflation and wage increases meant these savings alone would not produce sufficient trading profits to ensure the group's viability.
An Post's overall return for the year was boosted by a £40.5 million profit on the sale of shares acquired in Esat Telecom when it purchased the PostGEM Internet business.
