Royal Mail reports half billion drop in profits

Ahead of a rumoured breakup of the organisation International Distribution Services (formerly Royal Mail Group) has reported a large drop in revenues and an operating loss in the first half of the financial year.

The Group reported a total operating loss of £163 million, a fall from £311 million in the first half of 2021. The adjusted operating loss was £57 million, a massive fall from an almost half billion pound adjusted operating profit in the first half of 2021.

Amongst the figures, Royal Mail’s domestic arm had a loss of £219 million, a drop of almost £500 million from the first half of 2021. In its report, the postal operator attributed this to “weak parcel volumes, inability to deliver productivity improvements and impacts from industrial action”. As can be seen in yesterday’s news article by Apex Insight, the postal worker’s union disagrees strongly with this standpoint.

The international arm, GLS, which is rumoured to be sold off in the coming year, had an operating profit of £162 million, down 4.1%. This organisation is less unionised and has far fewer protections for its delivery and sorting personnel.

Simon Thompson, CEO of Royal Mail said of the problems at his organisation, many of which have appeared under his leadership, “We have always been clear we need change to survive. We have started turning the business around and will do whatever it takes. We have worked hard to deploy our contingency plans to minimise disruption to customers and impact on revenue. Our infrastructure plans are on time and we are now making the operational changes to turn Royal Mail into a thriving business that will provide great service for our customers at a competitive price and long- term job security for our people.”

In a veiled threat to the Communication Workers Union representing 115,000 delivery and sorting personnel at Royal Mail, the CEO said, “We would prefer to reach agreement with the CWU, but in any case we are moving ahead with changes to transform our business.”