Oman Post expects to break even in three years

Oman Post, part of Asyad Group — the nation’s logistics flagship, has vowed to emerge as a commercially viable company within the next three years, as it prepares to end its longstanding dependence on government subsidy to fund its operations.
According to Oman Post CEO Abdulmalik al Balushi, revenue growth will be underpinned by a projected upsurge in ecommerce, value addition across the postal supply chain, and the rollout of an array of postal logistics services.
“We will be breaking even in three years, which means Oman Post will be getting zero subsidy from the government after 2021,” said Al Balushi.
The pledge is part of a wider strategy by the state-owned company to evolve into what Oman Post has billed as ‘the Sultanate’s preferred postal logistics services provider’ with the accent on business excellence, operational efficiency and customer satisfaction.
Elements of this transformation were unveiled at the launch of the Oman Post Forum 2018 at Sultan Qaboos University Cultural Centre on Sunday night.
According to Oman Post officials, government funding support accounted for the lion’s share of the company’s operating costs averaging around 64 per cent annually for the 10 years till 2017. In 2018, following the repositioning of the company as a commercial entity and its integration with the Asyad Group, revenue has been boosted to around 50 per cent of total costs, with the government picking up the rest of the tab.
Contributing to the uptick in revenues, officials said, has been, among other things, a remarkable 227 per cent jump in number of parcels handled since the start of Oman Post’s transformation around three months ago. The Express Mail Service (EMS) recorded a 35 per cent jump in traffic during this period, while ecommerce related transactions climbed 26 per cent.
In remarks to journalists following the launch of the Oman Post Forum 2018, Abdulmalik al Balushi, CEO, singled out ecommerce as pivotal to the company’s revenue growth strategy. He added: “We are also thinking of government services, and of the postal office to serve as a hub for services, although this will need a lot of partners to come along. Today, we have products and services in hand, which we believe, if we capitalise on, whether it’s ecommerce throughout the supply chain, or whether its existing services like post office boxes, reducing costs, and so on, we can achieve our goal to break even by 2021.”
Asked if Oman Post plans to tap the local market for its funding requirements, he added: “There are multiple funding options available, but the question is whether there is a return on investment. Going forward, we will not do anything that doesn’t guarantee an IRR.”