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International Distribution Services PLC said Friday that its U.K. division Royal Mail swung to an adjusted operating loss for the first half of fiscal 2023, mostly due to the effect of three days of industrial action.
The company
IDS,
said that Royal Mail’s adjusted operating loss for the six month period ended in September was 219 million pounds ($248.1 million) compared with an adjusted operating profit of GBP235 million for the first half of fiscal 2022. This included a GBP70 million of direct negative impacts stemming from three days of industrial action, it said.
Royal Mail might require between 5,000 to 6,000 redundancies by the end of August, 2023, IDS said.
The company said that it expects Royal Mail to post full-year adjusted operating loss–a metric which strips out exceptional and other one-off items–to be around GBP350 million. The company said this estimate includes the direct and immediate effect of eight days of industrial action which have taken place or been notified to Royal Mail, but excluding any charges for voluntary redundancy costs.
“This may increase to around a GBP450 million loss if customers move volume away for longer periods following the initial disruption,” it said.
The company said that the loss for the full year would materially increase and it might require “further operational restructuring and headcount reduction” if the Communication Workers Union proceeds with the 16 days of industrial action announced.
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com
