(Add your Business Unit name here) Financial Results 2004/05 By Mr Khutso IMampeule Group CEO SOUTH AFRICAN POST OFFICE

Financial Results 2004/05

By

Mr Khutso IMampeuleGroup CEO

(Add your Business Unit name here)SOUTH AFRICAN POST OFFICE

HighlightsSolid 2nd Year of Profitability Healthy Balance SheetPositive Capital and Reserves PositionBest Practice Solvency & Liquidity StateStrong Cash Generated from OperationsSizeable Investment in Infrastructure & TechnologyPostbank Powers on (Leading in Mzansi Accounts)Passionately fulfills its Universal Service Obligation Rewards & Recognition in Innovation & Technology ApplicationRemains an Overall Good Corporate CitizenEmbraces Change and Looks Forward to a Brighter Future

Financial overview 2004/2005 SAPO Group

Sheet1

S.A POST OFFICE LTD AND POSTBANK AND SUBSIDIARIES

INCOME STATEMENT FOR THE PERIOD ENDING 31 MARCH 2004

ACTUAL RESULTS VS BUDGET

ActualsBudgetForecast

YEAR TO DATEfor thefor thefor the

ITEMActualBudgetActualVarianceChangeyearyearyearActualNovemberDecemberJanuaryFebruaryMarchForecasted

Previous Year2004/20052004/20052004/20052004/20052002/20032003/20042003/2004YTDTarget

R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000

INCOME436383200047786750004723811000-830310008%0000000000

SA POST OFFICE382925700038413570004180324000916540009%

CFG500988000898843000508514000-1711350002%

DOCEX335870003847500034973000-35500004%

12470007451677451657451657451677451654972829

OPERATING EXPENDITURE433669200045605640004588743000459000(6%)000

STAFF EXPENSES00000001220001129711297112971129711297178485

TRAVEL EXPENSES000000010001611611611611611805

MATERIAL AND SERVICES000000085000169967169967169967169967169967934835

ACCOMMODATION00000000000000

TRANSPORT0000000110000000011000

INTERNATIONAL CHARGES00000000000000

COST OF INSURANCE00000008000110751107511075110751107563375

PROVISION & WRITE OFFS00000000000000

COMMUNICATION SERVICES000000002083320833208332083320833104165

SECURITY SERVICES000000002250225022502250225011250

AUDIT,BANK & DIRECTORS FEES00000000000000

AGENT & LEGAL COSTS000000090007512175135751157512675130384627

CURRENCY ADJUSTMENTS000000060006772506772506772506772506772503392250

DEPRECIATION OF ASSETS00000000000000

SERVICE CONTRACTORS00000001556000683368336833683368331590165

INTEREST PAID00000004000106261062610626106261062657130

MARKETING0000000

RSC LEVY & OTHER EXPENSES00000000000000

INTERNAL CHARGES PAID00000000000000

SA POST OFFICE379847100037231470003966960000-17679000(4%)

CFG50400400080161800058754400015201000(17%)

DOCEX3421700035799000342390002937000(0%)

PROFIT / (LOSS) FROM TRADING OPERATIONS27140000218111000135068000-82572000398%0000000000

STAFF NON OPERATING EXPENDITURE00000000000000

SUBSIDY00000000000000

NON-OPERATING ITEMS00000000000000

NET PROFIT/LOSS0000000

-127023000-49722000

00

269538669851694

00

TOTAL POSTAL SERVICES00

PARCELS000%

SSC192825000203514000

CFG00

PARCELS70836000677440000%

0%0%

LETTER POST00%

PARCELS00%

FINANCIALS00%

OTHER00%

00%

GovendL:+2696000-1503000+2600000.R2.6 million write back east rand property.

Sheet3

2003/20042004/2005ChangeChange

R'000R'000R'000%

Operating income413535085343704160792350652266%235065226

Operating expenses41082107684235349271-127138503(3%)127138503

Profit from trading operations27140085135066808107926724398%

Non trading items-10186314493310450010349676441016%1034967644

Staff non operating items-140308000-616630007864500056%

Legal provisions0-11935000-11935000(100%)

Postbank unclaimed9784000-4289000-14073000(144%)

Subsidy263164856161663000-101501856(39%)

Uthingo dividends2700000025875000-1125000(4%)

Insurance premium refund02000000020000000100%

Money transfer unclaimed income272610000-27261000(100%)

PAYE333910000-33391000(100%)

Other non trading items20970003995500189850091%

Deferred taxation-225900028745800028971700012825%

Post retirement medical benefits-321994000512000000833994000259%

Net Profit / (Loss)-747230591068171308114289436810681713081530%1142894368

FINANCIAL STATEMENTS-747230001068172000

MBD001684E4.doc

MBD00164FD2.doc


Sheet1






ActualBudgetActualChangeyearyearyearActualNovemberDecemberJanuaryFebruaryMarchForecasted

2003/20042004/20052004/20052004/20052002/20032003/20042003/2004YTDTarget

R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000R'000

12470007451677451657451657451677451654972829

Operating profit / (loss)000

STAFF EXPENSES0001220001129711297112971129711297178485

TRAVEL EXPENSES00010001611611611611611805



TRANSPORT000110000000011000











INTEREST PAID0004000106261062610626106261062657130

MARKETING000



SA POST OFFICE30786000118210000213363500182577500

0

COURIER FREIGHT GROUP-301700097224000-79031000-76014000

0

DOCEX-62900026760007340001363000

PROFIT / (LOSS) FROM TRADING OPERATIONS271400002181100001350665001079265000000000000


SUBSIDY00000000000000



-127023000-49722000

00

269538669851694

00


PARCELS000%

SSC192825000203514000

CFG00

PARCELS70836000677440000%

0%0%

LETTER POST00%

PARCELS00%

FINANCIALS00%

OTHER00%

00%


Sheet2

Sheet3

MBD001684E4.doc

Profit / (Loss) from trading operations history

Chart1

-577409000

-350521000

-170196000

27140002.7600002

135067000

Financial History (2)

2000/20012001/2002% VAR2002/2003% VAR2003/2004% VAR

ITEMR'000R'000R'000R'000

INCOME32956050003289414000-0%35739600009%38304840007%

OPERATING EXPENDITURE38329970003616734000-6%37098650003%3694028000-0%

OPERATING PROFIT (LOSS)-537392000-327320000-39%--135905000-58%136456000200%

EARLY RETIREMENTS-173039000-78241000-55%-256188000227%-137098000-46%

MEDICAL AID DEF-258500000-249000000-4%-35700000043%-3720000004%

GSP EXPENSES0-13709000100%-72265000427%-9409500030%

GSP RECOVERIES14760800018017800022%488683000171%357260000-27%

NON OPERATING ITEMS-4194000-300000-93%239490000100%112302000-53%

NET OP. PROFIT/(LOSS)-825517000-488392000-41%-93185000-81%2825000-103%

SUBSIDIARIES

INCOME28683700052013600081%517621000-0%5221624131%

EXPENSES32685400054333700066%5519120002%503657534-9%

PROFIT / (LOSS)-40017000-23201000-42%-3429100048%18504879-154%

GROUP PROFIT /(LOSS)-8655340000-5115930000-41%0-1274760000-75%0213298790-117%

Notes: 2003/2004 not final numbers and not adjusted for bonus provision.

Financial History

SA POST OFFICE - FINANCIAL HISTORY

2000/20012001/2002VAR RANDS% VAR2002/2003VAR RANDS% VAR2003/2004VAR RANDS% VAR

ITEMR'000R'000R'000%R'000R'000%R'000R'000%

INCOME32956050003289414000-6191000-0%35739600002845460009%38292570002552970007%

OPERATING EXPENDITURE383299700036167340002162630006%3709865000-93131000-3%3798471000-88606000-2%

BONUS - VARAIBLE PAY00025000000-25000000-100%90500000-65500000-262%

OPERATING PROFIT (LOSS)-537392000-32732000021007200039%--13590500019141500058%30786000166691000123%

EARLY RETIREMENTS-173039000-782410009479800055%-256188000-177947000-227%-13730200011888600046%

MEDICAL AID DEF-258500000-24900000095000004%-357000000-108000000-43%-325000000320000009%

GSP EXPENSES0-13709000-13709000-100%-72265000-58556000-427%-94095000-21830000-30%

GSP RECOVERIES1476080001801780003257000022%488683000308505000171%357260000-131423000-27%

NON OPERATING ITEMS-4194000-300000389400093%239490000239790000-79930%95547000-143943000-60%

NET PROFIT/(LOSS)-825517000-48839200033712500041%-9318500039520700081%-728040002038100022%

SUBSIDIARIES

INCOME28683700052013600023329900081%517621000-25150000%534575000169540003%

EXPENSES326854000543337000-216483000-66%551912000-8575000-2%539093000128190002%

PROFIT / (LOSS)-40017000-232010001681600042%-34291000-11090000-48%-45180002977300087%

GROUP PROFIT /(LOSS)-8655340000-511593000353941000041%0-127476000384117000075%0-773220005015400039%

Notes

Negative is unfavourable

Postive is favourable

Net Profit

-865534000

-511593000

-127476000

Net Profit / (Loss)

Financial Year

R'000

SA Post Office Group - Financial Performance

Operating Profit

2000/20012000/20012000/2001-577409000

2001/20022001/20022001/2002-350521000

2002/20032002/20032002/2003-170196000

2003/20042003/20042003/200427140002.7600002

OPERATING PROFIT (LOSS)

PROFIT / (LOSS)

Operating Profit / (Loss)

Financial Year

R'000


Sheet1

2000/20012001/2002VAR RANDS% VAR2002/2003VAR RANDS% VAR2003/2004VAR RANDS% VAR2004/05

OPERATING PROFIT (LOSS)(537,392,000)(327,320,000)210,072,0000-(135,905,000)191,415,000130,786,0001666910001.226525882

PROFIT / (LOSS)(40,017,000)(23,201,000)16,816,0000(34,291,000)(11,090,000)(0)(4,518,000)297730000.8682453122

Operating Profit / (Loss)-577409000-35052100022688800001-1701960001803250000271400031964640002.0947711942135067000

2000/20012001/2002VAR RANDS% VAR2002/2003VAR RANDS% VAR

Net Profit / (Loss)-865534000-511593000-127476000

Sheet1

Financial History FCAST


ITEMR'000R'000R'000%R'000R'000%R'000R'000%

INCOME32956050003289414000-6191000-0%35739600002845460009%38294100002554500007%





MEDICAL AID DEF-258500000-24900000095000004%-357000000-108000000-43%-372000000-15000000-4%

GSP EXPENSES0-13709000-13709000-100%-72265000-58556000-427%-94095000-21830000-30%

GSP RECOVERIES1476080001801780003257000022%488683000308505000171%357260000-131423000-27%


NET PROFIT/(LOSS)-825517000-48839200033712500041%-9318500039520700081%-109543000-16358000-18%

SUBSIDIARIES

INCOME28683700052013600023329900081%517621000-25150000%52216241345414131%

EXPENSES326854000543337000-216483000-66%551912000-8575000-2%503657534482544669%

PROFIT / (LOSS)-40017000-232010001681600042%-34291000-11090000-48%1850487952795879154%


Notes



Turnover up 6% on previous year Postal services increase of 3.5% on prior year. Operating expenses increased by only 3%.

PRMA Liability reduced from R2.3 billion to R929 million

Income Statement Recognitions Deferred tax R287mPRMA : R512 million

R135m Profit from trading operations (2003/04 R27m)

Once-off Net profit of R1,068m

Key Achievements

Improved Financial Performance

Postbank depositors funds (Rm)

Key achievements Postbank accounts (000)

Review 2004/05Financial year

Income Statement


Sheet1









INCOME436383200047786750004723811000-830310008%0000000000

SA POST OFFICE382925700038413570004180324000916540009%

CFG500988000898843000508514000-1711350002%

DOCEX335870003847500034973000-35500004%

12470007451677451657451657451677451654972829


STAFF EXPENSES00000001220001129711297112971129711297178485

TRAVEL EXPENSES000000010001611611611611611805



TRANSPORT0000000110000000011000











INTEREST PAID00000004000106261062610626106261062657130

MARKETING0000000



SA POST OFFICE379847100037231470003966960000-17679000(4%)

CFG50400400080161800058754400015201000(17%)

DOCEX3421700035799000342390002937000(0%)



SUBSIDY00000000000000



-127023000-49722000

00

269538669851694

00


PARCELS000%

SSC192825000203514000

CFG00

PARCELS70836000677440000%

0%0%

LETTER POST00%

PARCELS00%

FINANCIALS00%

OTHER00%

00%


Sheet3

2003/20042004/2005ChangeChange

R'000R'000R'000%

Operating income413535085343704160792350652266%235065226

Operating expenses41082107684235349271-127138503(3%)127138503

Profit from trading operations27140085135066808107926724398%

Non trading items-10186314493310450010349676441016%1034967644

Staff non operating items-140308000-616630007864500056%

Legal provisions0-11935000-11935000(100%)

Postbank unclaimed9784000-4289000-14073000(144%)

Subsidy263164856161663000-101501856(39%)

Uthingo dividends2700000025875000-1125000(4%)

Insurance premium refund02000000020000000100%

Money transfer unclaimed income272610000-27261000(100%)

PAYE333910000-33391000(100%)

Other non trading items20970003995500189850091%

Deferred taxation-225900028745800028971700012825%

Post retirement medical benefits-321994000512000000833994000259%

Net Profit / (Loss)-747230591068171308114289436810681713081530%1142894368

FINANCIAL STATEMENTS-747230001068172000

MBD001684E4.doc

MBD00164FD2.doc

Balance sheet

Financial overview Balance Sheet

Sheet1









INCOME436383200047786750004723811000-830310008%0000000000

SA POST OFFICE382925700038413570004180324000916540009%

CFG500988000898843000508514000-1711350002%

DOCEX335870003847500034973000-35500004%

12470007451677451657451657451677451654972829


STAFF EXPENSES00000001220001129711297112971129711297178485

TRAVEL EXPENSES000000010001611611611611611805



TRANSPORT0000000110000000011000











INTEREST PAID00000004000106261062610626106261062657130

MARKETING0000000



SA POST OFFICE379847100037231470003966960000-17679000(4%)

CFG50400400080161800058754400015201000(17%)

DOCEX3421700035799000342390002937000(0%)



SUBSIDY00000000000000



-127023000-49722000

00

269538669851694

00


PARCELS000%

SSC192825000203514000

CFG00

PARCELS70836000677440000%

0%0%

LETTER POST00%

PARCELS00%

FINANCIALS00%

OTHER00%

00%


Sheet3

Group

Note20052003/042004/2005Change

R'000R'000R'000R'000

ASSETS

Noncurrent assets1,314,608923,7801,314,608390,828

Property, plant and equipment1919,969842,367919,96977,602

Investment properties25,11135,9025,111(30,791)

Intangible assets34,3205,4004,320(1,080)

Investments492,93238,05592,93254,877

Deferred taxation19292,2762,056292,276290,220

Current assets3,293,4312,131,7383,293,4311,161,693

Inventories589,52390,05489,523(531)

Trade and other receivables6614,356505,018614,356109,338

Cash and cash equivalents72,589,5521,536,6662,589,5521,052,886

TOTAL ASSETS4,608,0393,055,5184,608,0391,552,521

EQUITY AND LIABILITIES

Capital and reserves303,152(1,515,020)303,152303,152

Share capital8200,940200,940200,940200,940

Accumulated loss(647,788)(1,715,960)(647,788)(647,788)

Capital and reserves(446,848)(1,515,020)(446,848)(446,848)

Equity to be created9750,0000750,000750,000

Noncurrent liabilities2,679,4383,050,7192,679,4382,679,438

Interest bearing borrowings101,0612,1431,0611,061

Retirement benefit obligations11624,1891,229,494624,189624,189

Deposits from the public122,007,7121,772,2262,007,7122,007,712

Provisions1346,47646,85646,47646,476

Current liabilities1,625,4491,519,8191,625,4491,625,449

Trade and other payables141,125,1521,046,1571,125,1521,125,152

Funds collected on behalf of third parties239,192204,363239,192239,192

Provisions1388,64169,44088,64188,641

Taxation2,9412,5302,9412,941

Retirement benefit obligations1170,00075,00070,00070,000

Bank overdraft04,54200

Subsidy received in advance98,907116,63598,90798,907

Current portion of interest bearing borrowings106161,152616616

Contribution for future integration costs----

TOTAL EQUITY AND LIABILITIES4,608,0393,055,5184,608,0394,608,039

MBD001684E4.doc

MBD00164FD2.doc

Financial overview Balance Sheet

Sheet1









INCOME436383200047786750004723811000-830310008%0000000000

SA POST OFFICE382925700038413570004180324000916540009%

CFG500988000898843000508514000-1711350002%

DOCEX335870003847500034973000-35500004%

12470007451677451657451657451677451654972829


STAFF EXPENSES00000001220001129711297112971129711297178485

TRAVEL EXPENSES000000010001611611611611611805



TRANSPORT0000000110000000011000











INTEREST PAID00000004000106261062610626106261062657130

MARKETING0000000



SA POST OFFICE379847100037231470003966960000-17679000(4%)

CFG50400400080161800058754400015201000(17%)

DOCEX3421700035799000342390002937000(0%)



SUBSIDY00000000000000



-127023000-49722000

00

269538669851694

00


PARCELS000%

SSC192825000203514000

CFG00

PARCELS70836000677440000%

0%0%

LETTER POST00%

PARCELS00%

FINANCIALS00%

OTHER00%

00%


Sheet3

Group

Note20052003/042004/2005Change

R'000R'000R'000R'000

ASSETS

Noncurrent assets1,314,608923,7801,314,608390,828

Property, plant and equipment1919,969842,367919,96977,602

Investment properties25,11135,9025,111(30,791)

Intangible assets34,3205,4004,320(1,080)

Investments492,93238,05592,93254,877

Deferred taxation19292,2762,056292,276290,220

Current assets3,293,4312,131,7383,293,4311,161,693

Inventories589,52390,05489,523(531)

Trade and other receivables6614,356505,018614,356109,338

Cash and cash equivalents72,589,5521,536,6662,589,5521,052,886

0

TOTAL ASSETS4,608,0393,055,5184,608,0391,552,521

EQUITY AND LIABILITIES

Capital and reserves303,152(1,515,020)303,1521,818,172

Share capital8200,940200,940950,940750,000

Accumulated loss(647,788)(1,715,960)(647,788)1,068,172

Noncurrent liabilities2,679,4383,050,7192,679,438(371,281)

Interest bearing borrowings101,0612,1431,061(1,082)

Retirement benefit obligations11624,1891,229,494624,189(605,305)

Deposits from the public122,007,7121,772,2262,007,712235,486

Provisions1346,47646,85646,476(380)

Current liabilities1,625,4491,519,8191,625,449105,630

Trade and other payables141,125,1521,046,1571,125,15278,995

Funds collected on behalf of third parties239,192204,363239,19234,829

Provisions1388,64169,44088,64119,201

Taxation2,9412,5302,941411

Retirement benefit obligations1170,00075,00070,000(5,000)

Bank overdraft04,5420(4,542)

Subsidy received in advance98,907116,63598,907(17,728)

Current portion of interest bearing borrowings106161,152616(536)

0

TOTAL EQUITY AND LIABILITIES4,608,0393,055,5184,608,0391,552,521

MBD001684E4.doc

MBD00164FD2.doc

Financial overview Statement changes in equity

Sheet1

Share capitalEquity to be createdAccumulated lossTotal

R'000R'000R'000R'000

Balance at 31 March 1999200,940(46,393)154,547

Loss for the period0(90,240)(90,240)

Balance at 31 March 2003200,9400(1,641,237)(1,440,297)

Net loss for the year00(74,723)(74,723)

Balance at 31 March 2004200,9400(1,715,960)(1,515,020)

Equity to be created0750,0000750,000

Net profit for the year001,068,1721,068,172

Balance at 31 March 2005200,940750,000(647,788)303,152

Company

Balance at 31 March 1999200,940(40,542)160,398

Loss for the period0(96,713)(96,713)

Balance at 31 March 2003200,9400(1,645,445)(1,444,505)

Net loss for the year00(72,802)(72,802)

Balance at 31 March 2004200,9400(1,718,247)(1,517,307)

Equity to be created0750,0000750,000

Net profit for the year001,076,8861,076,886

Balance at 31 March 2005200,940750,000(641,361)309,579

Capital expenditure

Improvement in working capital.

Total debtors days SAPO - 19 days, achieved target, as a result R100 million improvement in cash flow.CFG 57 days.

Cash generated from operations R371 million (2003/04 R283 million).

Post Office excluding Postbank has R333m in short term investment.

Key achievements Working capital

Deferred tax of R287 million.

Funding level the pension fund is 127% as at 31 December 2004. Conversion from defined benefit to defined contribution.

R750 million increase in share capital.Increase in capital & reserves of R1.8 billion.

Cash & cash equivalents increased by R1 billion.

Key achievements Balance sheet

Financial OverviewPAST 5 YEARS

Net Profit / Loss history (R000)

Chart3

-865534000

-511593000

-127476000

-74723000

1068172438.52

Financial History (2)

2000/20012001/2002% VAR2002/2003% VAR2003/2004% VAR

ITEMR'000R'000R'000R'000

INCOME32956050003289414000-0%35739600009%38304840007%

OPERATING EXPENDITURE38329970003616734000-6%37098650003%3694028000-0%

OPERATING PROFIT (LOSS)-537392000-327320000-39%--135905000-58%136456000200%

EARLY RETIREMENTS-173039000-78241000-55%-256188000227%-137098000-46%

MEDICAL AID DEF-258500000-249000000-4%-35700000043%-3720000004%

GSP EXPENSES0-13709000100%-72265000427%-9409500030%

GSP RECOVERIES14760800018017800022%488683000171%357260000-27%

NON OPERATING ITEMS-4194000-300000-93%239490000100%112302000-53%

NET OP. PROFIT/(LOSS)-825517000-488392000-41%-93185000-81%2825000-103%

SUBSIDIARIES

INCOME28683700052013600081%517621000-0%5221624131%

EXPENSES32685400054333700066%5519120002%503657534-9%

PROFIT / (LOSS)-40017000-23201000-42%-3429100048%18504879-154%

GROUP PROFIT /(LOSS)-8655340000-5115930000-41%0-1274760000-75%0213298790-117%

Notes: 2003/2004 not final numbers and not adjusted for bonus provision.

Financial History

SA POST OFFICE - FINANCIAL HISTORY


ITEMR'000R'000R'000%R'000R'000%R'000R'000%

INCOME32956050003289414000-6191000-0%35739600002845460009%38292570002552970007%





MEDICAL AID DEF-258500000-24900000095000004%-357000000-108000000-43%-325000000320000009%

GSP EXPENSES0-13709000-13709000-100%-72265000-58556000-427%-94095000-21830000-30%

GSP RECOVERIES1476080001801780003257000022%488683000308505000171%357260000-131423000-27%


NET PROFIT/(LOSS)-825517000-48839200033712500041%-9318500039520700081%-728040002038100022%

SUBSIDIARIES

INCOME28683700052013600023329900081%517621000-25150000%534575000169540003%

EXPENSES326854000543337000-216483000-66%551912000-8575000-2%539093000128190002%

PROFIT / (LOSS)-40017000-232010001681600042%-34291000-11090000-48%-45180002977300087%


Notes



Net Profit

-865534000

-511593000

-127476000

-74723000

Net Profit / (Loss)

Financial Year

R'000


Operating Profit

2000/20012000/20012000/2001-577409000

2001/20022001/20022001/2002-350521000

2002/20032002/20032002/2003-170196000

2003/20042003/20042003/200427140002.7600002

OPERATING PROFIT (LOSS)

PROFIT / (LOSS)

Operating Profit / (Loss)

Financial Year

R'000


Sheet1


OPERATING PROFIT (LOSS)(537,392,000)(327,320,000)210,072,0000-(135,905,000)191,415,000130,786,0001666910001.226525882

PROFIT / (LOSS)(40,017,000)(23,201,000)16,816,0000(34,291,000)(11,090,000)(0)(4,518,000)297730000.8682453122

Operating Profit / (Loss)-577409000-35052100022688800001-1701960001803250000271400031964640002.0947711942

2000/20012001/2002VAR RANDS% VAR2002/2003VAR RANDS% VAR2003/20042004/2005

Net Profit / (Loss)-865534000-511593000-127476000-747230001068172439

Sheet1

-577409000

-350521000

-170196000

27140002.7600002

Financial History FCAST

-865534000

-511593000

-127476000

-74723000


ITEMR'000R'000R'000%R'000R'000%R'000R'000%

INCOME32956050003289414000-6191000-0%35739600002845460009%38294100002554500007%





MEDICAL AID DEF-258500000-24900000095000004%-357000000-108000000-43%-372000000-15000000-4%

GSP EXPENSES0-13709000-13709000-100%-72265000-58556000-427%-94095000-21830000-30%

GSP RECOVERIES1476080001801780003257000022%488683000308505000171%357260000-131423000-27%


NET PROFIT/(LOSS)-825517000-48839200033712500041%-9318500039520700081%-109543000-16358000-18%

SUBSIDIARIES

INCOME28683700052013600023329900081%517621000-25150000%52216241345414131%

EXPENSES326854000543337000-216483000-66%551912000-8575000-2%503657534482544669%

PROFIT / (LOSS)-40017000-232010001681600042%-34291000-11090000-48%1850487952795879154%


Notes



Balance sheet

SAPO

SA POST OFFICE GROUP

2000/012001/022002/032003/042004/05

INCOME STATEMENT (R'000)

Operating Revenue33772800003484050000367595000040200030004259064000

Operating Expenses43854310003995116000400991200040924670003771621000

Operating Profit / (Loss) before subsidy-1008151000-511066000-333962000-72464000487443000

Net finance expense-32222000-33764000-11271000-16523000-28587000

2000/012001/022002/032003/042004/05

BALANCE SHEET (R'000)

Funds Supplied by:22365540002445516000239995600030555180004311987000

Capital and reserves-801227000-1312821000-1440297000-1515020000-280090000

Non-current liabilities including deposits

Payable on demand18863150002025843000227975800030507190002989209000

Current liabilities11514660001732494000156049500015198190001602868000

Funds Required by:22365540002445516000239995600030555180004311986000

Non-current assets124589400011408860009705600009237800001024590000

Current assets9906600001304630000142939600021317380003287396000

2000/012001/022002/032003/042004/05

CASH FLOW (R'000)

Net cash inflow/(outflow) from operating activities-452185000-298663000-161985000-13381300020399000

Net increase in operating funds0212263000569602000231135000

Net cash inflow/(outflow) from investing activities-4267900010758800014399000-105637000-242354000

Net cash inflow from financing activities10419000600000000930000002883270001048382000

2000/012001/022002/032003/042004/05

AVERAGE NUMBER OF EMPLOYEES25,94323,84221,59020,77318,843

REVENUE PER EMPLOYEE130181146131170262193521226029

EXPENDITURE PER EMPLOYEE169041153996154566157748145381

PROFIT / (LOSS) PER EMPLOYEE-38860-21436-15468-348825869

STAFF COSTS21663010001944972000273508900022803050002285452000

Staff costs as % of operating revenue64%56%74%57%54%

Staff costs as % of operating expenses49%49%68%56%61%

2000/012001/022002/032003/042004/05

AVERAGE SERVICE POINTS2,6752,7032,6132,5852,561

SERVICE POINTS IN OPERATION2,7622,6432,5832,5872,534

Post Offices1,0739239701,0861,121

Postal Agencies4775753835

Retail Post Offices205200199189183

Retail Postal Agencies1,4371,4451,3391,2741,195

Revenue per service point12625351288957140679315551271663047

2000/012001/022002/032003/042004/05

SOLVENCY AND LIQUIDITY

Current ratio0,9 : 10,8 : 10,9 : 11,4 : 12,2 : 1

Acid test ratio0,9 : 10,7 : 10,9 : 11,3 : 12,2 : 1

SAPO (2)


2000/012001/022002/032003/042004/05






2000/012001/022002/032003/042004/05



Capital and reserves-801227000-1312821000-1440297000-1515020000303152000






Current assets9906600001304630000142939600021317380003293431000

2000/012001/022002/032003/042004/05

CASH FLOW (R'000)





2000/012001/022002/032003/042004/05





STAFF COSTS21663010001944972000273508900022803050002285452000



2000/012001/022002/032003/042004/05


POINTS IN OPERATION2,7622,6432,5832,5872,534

Post Offices1,0739239701,0861,121




Revenue per service point (R'000)12625351288957140679315551271663047


2000/012001/022002/032003/042004/05

Current ratio0,9 : 10,8 : 10,9 : 11,4 : 12,2 : 1

Acid test ratio0,9 : 10,7 : 10,9 : 11,3 : 12,2 : 1

Net cash inflow/(outflow) from operations (R000)

Employee ratios

SAPO


2000/012001/022002/032003/042004/05






2000/012001/022002/032003/042004/05









Current assets9906600001304630000142939600021317380003287396000

2000/012001/022002/032003/042004/05

CASH FLOW (R'000)





2000/012001/022002/032003/042004/05





STAFF COSTS21663010001944972000273508900022803050002285452000



2000/012001/022002/032003/042004/05



Post Offices1,0739239701,0861,121





2000/012001/022002/032003/042004/05


Current ratio0,9 : 10,8 : 10,9 : 11,4 : 12,2 : 1

Acid test ratio0,9 : 10,7 : 10,9 : 11,3 : 12,2 : 1

SAPO (2)


2000/012001/022002/032003/042004/05






2000/012001/022002/032003/042004/05









Current assets9906600001304630000142939600021317380003287396000

2000/012001/022002/032003/042004/05

CASH FLOW (R'000)





2000/012001/022002/032003/042004/05





STAFF COSTS21663010001944972000273508900022803050002285452000



2000/012001/022002/032003/042004/05



Post Offices1,0739239701,0861,121






2000/012001/022002/032003/042004/05

Current ratio0,9 : 10,8 : 10,9 : 11,4 : 12,2 : 1

Acid test ratio0,9 : 10,7 : 10,9 : 11,3 : 12,2 : 1

employee ratios


2000/012001/022002/032003/042004/05


R'000R'000R'000R'000R'000



PROFIT / (LOSS) BEFORE TAXATION PER EMPLOYEE-33348-21436-5881-348841433

-865151000-511066000-126962000-72464000780714000

2000/012001/022002/032003/042004/05




Net Profit / (Loss) before taxation-865151000-511066000-126962000-72464000780714000

-865151000-511066000-126962000-72464000780714000

STAFF COSTS21663010001944972000273508900022803050002285452000



2000/012001/022002/032003/042004/05



Post Offices1,0739239701,0861,121






2000/012001/022002/032003/042004/05

Current ratio0,9 : 10,8 : 10,9 : 11,4 : 12,2 : 1

Acid test ratio0,9 : 10,7 : 10,9 : 11,3 : 12,2 : 1

Solvency and liquidity

SAPO


2000/012001/022002/032003/042004/05






2000/012001/022002/032003/042004/05









Current assets9906600001304630000142939600021317380003287396000

2000/012001/022002/032003/042004/05

CASH FLOW (R'000)





2000/012001/022002/032003/042004/05





STAFF COSTS21663010001944972000273508900022803050002285452000



2000/012001/022002/032003/042004/05



Post Offices1,0739239701,0861,121





2000/012001/022002/032003/042004/05


Current ratio0,9 : 10,8 : 10,9 : 11,4 : 12,2 : 1

Acid test ratio0,9 : 10,7 : 10,9 : 11,3 : 12,2 : 1

SAPO (2)


2000/012001/022002/032003/042004/05






2000/012001/022002/032003/042004/05









Current assets9906600001304630000142939600021317380003287396000

2000/012001/022002/032003/042004/05

CASH FLOW (R'000)





2000/012001/022002/032003/042004/05





STAFF COSTS21663010001944972000273508900022803050002285452000



2000/012001/022002/032003/042004/05



Post Offices1,0739239701,0861,121






2000/012001/022002/032003/042004/05

Current ratio0,9 : 10,8 : 10,9 : 11,4 : 12,0 : 1

Acid test ratio0,9 : 10,7 : 10,9 : 11,3 : 12,0 : 1

The Way Forward Focus Areas:2005/06

AFTER THE TURNAROUND SAPO IS WELL POSITIONED TO FACE ADDITIONAL PRESSURE FROM TRENDS IN THE POSTAL INDUSTRY * Average of selected countriesSource: Pitney Bowes; McKinsey analysis. . . but therein lie opportunitiesAdditional challenges . . .

SAPO strategic postureBe the premier commercial organisation enabling the South African economy with integrated solutions in the areas of CommunicationsLogistics Financial ServicesAccess to Government ServicesCreate a great customer experience through targeted products and high-quality customer serviceCompetently and diligently advance USO in partnership with the governmentBuild a high-performing organisation, which respects, develops, recognises, and rewards its employeesKey strategic themes for SAPO GroupSource:Management workshops; McKinsey analysis FUTURE ASPIRATIONS SUPPORTED BY STRATEGIC POSTURE AND 5 KEY STRATEGIC THEMES FOR THE GROUPDrive operational excellence to achieve top-quality at benchmark costBe governments preferred partner for economic enablement within the scope of our product and service offerings and in the delivery of government servicesAchieve customer intimacy and leverage this for growth in Communication, Logistics and Financial ServicesBuild a high performance culture and develop capabilities throughout the organisation12345Strengthen the public perception of SAPO as a trusted brand

AS THEY CAN BE THE BASE FOR A STRONG RELATIONSHIP WITH RETAIL CUSTOMERS THROUGH PUBLIC SERVICES Service providedService not provided-Country/Postal operatorPublic universal services besides mail Germany/Deutsche PostUK/ConsigniaItaly/Poste ItalianeFrance/La PosteSpain/CorreosSwitzerland/Swiss PostBelgium/La PostePortugal/CTT PostPoland/Poczta PolskaCzech Repulic/Ceska PostaHungary/Magyar PostaAustria/Post AGIreland/An PostSweden/PostenNetherlands/TPGNorway/PostenFinland/Suomen Posty OyDenmark/PostTurkey/PTTGreece/Hellenic PostPensions/ benefits paymentUtilities bill paymentTax collection

--Everyone interacts with the Postal Operators several times in a year

SAPO should consider opportunities in public services, such asPensions and benefits represents a huge untapped potentialUtilities bills are a lost opportunity that should be regainedTax collection is another path to be explored

Other opportunities should be explored (e.g. payment of traffic fines)Data not available?*Belgian Post provides a deposit service onto any bank account which is in practice used mostly for bill paymentSource:McKinsey analysis------*?????-Example: postal operators services beside mailNOT EXHAUSTIVE

ADDITIONAL GOVERNMENT OPPORTUNITIES FOR SAPOTransport[PMG note: graphics not included, please email [email protected]] Source:SAPOGovernment departmentOpportunities for SAPOCar registrationTraffic finesDrivers licencesHome AffairsID booksPassportWork permitsHealthBirth/death certificatesDistribution of medicinesEducationStudent textbooksDistribution of exam papersWelfareChild grantsMaintenance grantsOthersAddress verification/certification

Source:Management workshops; McKinsey analysisSAPO VISION AND MISSION NEED TO BE REVISED TO REFLECT THE NEW STRATEGIC POSTUREFOR DISCUSSIONMissionVisionFromToTo be the leading provider of postal and related services in AfricaTo be recognised among the top 10 providers of postal and related services in the worldMeasures of successProfitability operating margin/ROICEfficiency operational KPIsCustomer RatingsEmployee SatisfactionCorporate social responsibilityWe will enable the nation to efficiently connect with the world by distributing information, goods, financial and government services; leveraging our broad reach and embracing change, technology and innovation We will connect people through the distribution of information, goods, and financial services; building on our strengths as a provider of postal services and by embracing change

THE ASPIRED NEW POST OFFICERetailQueue controlATM [PMG note: graphics not included, please email [email protected]] CounterBack officeSource:ExCo meeting 12 SeptemberCommunication centreBusiness centre

Thank you

Post Retirement Medical Aid HR

7 November 2005(Add your Business Unit name here)SOUTH AFRICAN POST OFFICE

Post Retirement Medical AssistancePrior to collective agreement, liability in balance sheet = R2.6 billion rule AC 116, to report in the balance sheet placed Post Office in a liquid positionApproximately R967 million constituted pensioner liabilityThe remaining approx R1.6 billion constituted Active employee liability.

Agreement reached on 10th May 2005, to remove the benefit of PRMA for active employees (future pensioners)This resulted in a positive impact on the balance sheet of approximately R1.6 billion (R1.6 billion of the medical aid liability removed)The above came into effect from 1 July 2005Pensioner liability of approximately R967 million in the process of being correctedUtilise partly the contribution reserve (in process of acquiring a portion through a commercial settlement with Board of Trustees)The balance long term government bond with consent of TreasuryCost to remove liability of current pensioners approx R420 millionBenefit of removing the liability R967 million liability removed from the balance sheetMedical Aid Liability reduced to zeroPost Retirement Medical Assistance

Post Retirement Medical AssistanceNote: Exits since 2000, that qualified for PRMA = 1198 out of a total exits of 11498 this is a mere 10%.

Chart1

681

2194

65

670

1505

5938

445

1198

85

51

SAPO EXITS SINCE JAN 2000 - MAY 2005

Sheet1

Sheet1

681

2194

65

670

1505

5938

445

1198

85

51

SAPO EXITS SINCE JAN 2000 - MAY 2005

Sheet2

Sheet3

SAPOS DELIVERY SYSTEM SHOULD ALSO BE RESHAPED FUTURE VALUE DELIVERY SYSTEMSource:Management workshops; McKinsey analysisMarketGroup strategy Transaction centre (branch network, call centres, Truebill, Trust Centre, etc.)Support functions (Finance, HR, IT, S&I, Internal Audit, Risk Mgmt, Legal, SCM, Properties,; tailored to users where required)Government and international relationshipsGroup marketing and communicationsKey account managementFOR DISCUSSION

THE FOCUS ON OPERATIONAL EXCELLENCE SHOULD BE PURSUED BY BUs AND SFs ADDRESSING THEIR SPECIFIC ISSUES OVER TIME (1/2)MailSource:Management workshops; McKinsey analysisOptimise mail operations to lower cost and grow volume through improved operations1LogisticsPostbankRetailSupport functionsBuild an efficient nationwide logistics network (set stage for/explore international alliance)Achieve benchmark cost levels for Postbank operationsOptimise counters operating branches as efficient distribution channelRefocus to operate as value-adding, cost effective and reliable internal service providersOverall strategic priorityArea

REFINING THE DISTRIBUTION MODEL SHOULD INCLUDE A NEW SERVICE LEVEL FOR SAPO CURRENT ACCOUNT HOLDERS: PRIORITY LINESource: McKinsey analysisPOST OFFICE/MAIL SERVICESPOSTBANKCurrent SAPO clients are still served by the single queueIdle teller calls first client in the single queueCurrent account holders have dedicated service linePostbankPostbankPostbankBy the way Mr Tema, have you heard about our new life policy? If you wish, you could talk to your account manager

Documents

(Add your Business Unit name here) Financial Results 2004/05 By Mr Khutso IMampeule Group CEO SOUTH AFRICAN POST OFFICE