All is far from well at An Post, but perhaps not as bad as the figures published yesterday might suggest. Talk of the company suffering its worst ever losses and having to consider asset disposals gives the impression of a business that is in grave financial difficulty.
You would have to be a very generous soul not to question whether the timing of the announcement and its tone was not in some way linked to a wider agenda. After all, Comreg, which regulates An Post, is due to rule shortly - possibly as early as today - on whether or not the company will be able to increase its prices. The proposed rise in the price of a standard stamp from 41 cents to 48 cents will not be popular.
The move to take into the 2002 accounts the full €52 million cost of 1,100 redundancies planned over the next two years has turned an operating loss of €17 million into a dramatic post-tax loss of just over €70 million. This rather painful decision will have a positive pay-off going forward as savings kick in. In the meantime it helps make a price rise look justified.
It should also be borne in mind that the company's new chief executive, Mr Donal Curtin, is only a couple of weeks in the job. There is a not-so-glorious tradition in business of using the changing of the guard to get bad news out of the way.
No doubt Comreg will look a little deeper than yesterday's headline numbers, and other interested parties should do likewise. An Post is a growing business, with turnover up almost €59 million to €683 million last year. As the outgoing chief executive, Mr John Hynes, has pointed out, its postal volumes are growing, which makes it almost unique among European operators. An Post is also virtually debt free, with borrowings of less than €5 million and fixed assets of over €300 million.
The company's failure to convert increased turnover into profits last year highlights the real issues to be tackled: controlling costs and improving efficiency.
Any decision to allow An Post increase the price of stamps would be ill-judged if there is no progress in this area. Doing so under these circumstances would be tantamount to asking the consumer to pick up the tab for the company's failure to address this challenge.
In this context it is reassuring to hear that cost reduction will form a central plank of the revised strategy to return the company to profitability that Mr Curtin will present to the board of An Post in the autumn. More ominous are his comments that he may be back to Comreg shortly looking for another increase in the price of stamps.