JSC Ukrposhta, the state postal operator, expects UAH 128 million in losses in January-March 2021 versus UAH 90 million in profit in the first quarter of 2020, the operator has said.

"Amid a constant increase in volumes in the main areas of business, Ukrposhta, according to preliminary data, expects about UAH 128 million in losses over the first quarter of 2021. This is primarily due to a sharp increase in the minimum wage in the country, which directly increases the key [70%] item of expenditure of the enterprise for the wage fund," the report said.

Ukrposhta said that the logical decision of any private company in such a situation would be to revise the cost of services or products and raise prices. At the same time, for the state postal operator, such changes are regulated by the state and must be agreed with a number of interested bodies.

The company also said that every month of blocking decisions on the establishment of economically justified tariffs for services, crucial for the operation of the enterprise, costs Ukrposhta dozens of millions of hryvnias.

"According to the results of the first quarter of 2021, we have a paradox: in the most competitive segment, the volumes of domestic and international shipments [parcels and small packages] increased by 36% and 30%, respectively, while the overall financial condition of the company, unfortunately, is unprofitable. Three more months of such 'profoundness' and the company may be left without the further development and support of international financial organizations," CEO of Ukrposhta Igor Smelyansky said.

According to him, instead of contributing to the success of the state-owned enterprise, Ukrposhta receives only populism from the authorities and an unwillingness to bring the regulated tariffs for services, which form 53% of all company revenues, in line with economically justified ones.

Smelyansky also said that the company has been demonstrating stable growth in volumes and revenues for the second year in a row, paying more than UAH 1 billion in taxes and dividends to the state budget, while increasing salaries for employees, attracting international investment and investing in the development of vehicles and infrastructure.

According to the international auditor (Baker Tilly Ukraine LLC is an independent member of Baker Tilly International), in 2020 Ukrposhta received UAH 9.18 billion of net income and UAH 164.9 million of net profit, of which the company will pay UAH 82.5 million of dividends to the state budget.

According to the company's unaudited statements, published on Thursday, in January-March 2021, Ukrposhta received UAH 127.758 million in losses, increasing its net income from the sale of services by 27.4%, to UAH 2.62 billion.

The cost of goods sold in the first quarter of 2021 amounted to UAH 2.38 billion versus UAH 1.77 billion in the same period in 2019 (an increase of 34.5%).