It was on September 24th 1828, when the Governor of Greece, Ioannis Kapodistrias, signed the decree for the establishment of the first public service of the Greek state — the Greek Post.

With the need for the creation of ELTA arising from Dramali’s invasion in the Peloponnese (you see, the warlords didn’t have mobile phones, but only mounted couriers to communicate), the future of the country’s first public service looked bright. Particularly since the first public building that was built in Athens in 1835, when it became the capital, was that of ELTA, with 10 employees and two distributors.

Almost 200 years later, things for the Hellenic Post have changed radically. Another painful restructuring plan is being put into effect, which resembles a defibrillator intervention on a patient making his death rattle.

A series of sins…actions and omissions all these years — from governments, managements, citizens but also workers — sent ELTA to the intensive care bed, with Kyriakos Pierrakakis rather rightfully speaking of “difficult decisions” (like the closing of 204 branches) that must be taken if we want our post service to survive.

The “detail” is that this is the umpteenth time such difficult decisions are being taken because for decades now, ELTA have been sinking, but everyone pretends they don’t see it.

And it is not the first time that hundreds of branches of the one and only service that has the duty to connect mainland and island Greece physically… are being shut down.

They stayed in…the 90s

The convenient excuse would be to say that this is a “logical development”, given that postal services all over the world went — and still go — through very dark times, with the use of the Internet and social networks changing the way people communicate.

Yes, the truth is that letter mail declined dramatically, since because of technology the postal volume dropped by over 40% in the five-year period from 2018 onwards.

Letter mail becomes outdated and is rarely used for communication by people or services, even for sending greetings via cards, while it constantly loses share to new technologies such as e-banking, e-statement, e-invoice.

At the same time however, in a strange way, the less people needed to use the post office… the more the need to use the post office increased. Letters are minimal — except for some utility bills etc — but where there is massive volume of work is parcels.

With e-commerce increasing so much that courier companies cannot handle it worldwide, and shipments from China and other parts of the world booming, ELTA had a golden opportunity to dominate the market.

In the beginning of the previous decade — while alarm bells were ringing for ELTA viability — managements seemed frozen in front of the danger, like the rabbit that freezes when car headlights hit it, unable to do anything. Ideas and opportunities existed — but almost nothing was implemented correctly.

Example: there was an idea and plan to expand ELTA parcel lockers in every neighbourhood or central location nationwide, with 24/7 parcel service — but for unknown reasons that was never implemented. At least not by ELTA — because private companies implemented it with huge success…

Then, as technology showed the transition to new methods was mandatory, ELTA changed nothing, with their managements pretending not to see what was coming. Example: we entered the millennium with ELTA being the only postal service in the EU that did not have sorting machines for automatic address reading.

While other postal services had robotic systems or at least scanners — the Greek postman had to separate and classify letters manually.

This refusal of modernization, the… tendency for scandals, general mismanagement, delays in processing shipments, indifference for customer needs and other factors led to the loss of many major customers and the reputational destruction of the Hellenic Post, in an era where competition was exploding.

And this despite the fact that the “bells” were ringing that the future would be bleak.

Example: only in the period 1993–2002 the company accumulated losses of €284m, which the state covered with a capital increase of €295m.

Next followed the necessary effort to correct the situation with a series of investments (mainly modernization infrastructure) of €360m funded by EU resources, in 2007.

That year however, ELTA showed profits that did not exceed 1% of turnover, with 70% of revenue going to wages. ELTA were breathing dangerously and this became evident in 2009 when the company recorded for the first time losses of €37m.

That year — as the crisis had already shown its teeth — the appearance of consecutive years of losses led the government to urgently seek a strategic investor. “Urgently” not exaggerated — since projections showed that by 2024 turnover would drop 50% due to the shrinking of postal volume from technological developments. They were not wrong — as the 2024 financials show: pre-tax results from continuing operations recorded losses of €7.95m, increased from €6.9m in 2023, while net results after tax were losses of €10.35m (same as two years ago). Turnover increased just 2% to €249m from €243.3m in 2023 and €600m in 2009 — but that is not enough to counter the rise of minimum wage and structural pathologies haunting the organization for decades.

With equity remaining negative at –€140.1m, pressures from continuing liabilities to third parties increase, e.g. the April restructuring agreement of debts to EFKA of €62.46m (20 year repayment) is only one “breath”.

The payment standstill and scandals

Since the sale tender never happened and rumors that German post, or French, or Belgian post would take over “to impose order” remained rumors — since 2018 ELTA have passed to HCAP control. To understand how difficult the task was: the turnover at takeover was €270m (+€45m from electricity retail) with wage cost at €220m for 6,000 employees.

HCAP replaced 4 CEOs in 5 years trying to find one with vision — who also would not be burned by the hot potato. Because as anyone with minimal financial knowledge understands — the letter would never arrive at ELTA.

After they lost also the privilege of pension distribution — which today is paid electronically — the situation seemed possible to be partly saved by a handful of corporate clients who sent and still send regular letters to customers: electricity, water, gas bills etc, advertising mail, banks, services.

Thus in this climate of decay — in May 2018 a bomb exploded that nobody could believe. When some PPC customers suddenly found themselves with power cut for unpaid bills that they had actually paid via ELTA — the scandal was revealed. To cover its liquidity problem, ELTA management chose to use as “borrowed” the money it collected on behalf of PPC, not paying it to PPC and using it to survive.

Then the expertise of one of the Big 4 (PwC) was “drafted”. In its 3-year plan for ELTA transformation and rescue it proposed closure of branches that operated with huge cost but brought only ~€5k per month turnover (e.g. the branch inside Parliament!), staff reduction via voluntary exit, new collective agreements, digitization of outdated systems, strengthening courier business and providing new products like insurance and pension programs. Many of these were implemented.

Example: with the voluntary exit (€380m cost) permanent staff dropped to 3,500, remaining workers got 18% wage cuts. The bad thing: the experienced postmen who knew how to do the job even manually were replaced by leased staff or temp young workers, with non-competitive pay and nobody to guide them. Not the first time branch closures happened: back then 143 of the 1,150 branches closed, reducing cost but not improving service quality.

HCAP tried to fix things with extended hours, competitive pricing, new practices like digital postman with digital devices, adding robots to sorting, strengthening smart locker network (PostBox), but everything seemed the same. The big problem — the “bleeding” — seemed impossible to stop, reaching 2020 with ELTA losing €7m per month.

The situation was a double-edged sword: they had no money to fix the problems, and the problems cost even more money. ELTA seemed to be slapping themselves and let anyone else slap them at will. This was proven in 2022 when internal/external warnings about IT system vulnerabilities (outdated apps, lack of staff training, common easily guessed passwords) that warned of hacker attacks — came true. A cyberattack hit ELTA, paralyzed them and worst — sent the data of more than 4.5 million citizens to the dark web.

Management — which could not fix IT because there were no resources — had to recognize in 2022 results the cost of fixing the cyberattack. As icing on the cake, that amounted to €3.6m plus €1.16m cost from under-operation of services. Then another €2.9m fine by the Data Protection Authority. Total cost from outdated underfunded IT — over €7m.

In the ICU

In 2022 — five years after the 3-year plan of PwC that became five years — ELTA looked like Sleeping Beauty, but in the ICU bed, intubated, with no hope. That year, auditor Grant Thornton found in the accounts substantial doubt about the going concern of ELTA. Not by chance: the group showed losses of €27.9m and solo €24.8m. The auditor sounded the alarm: ongoing viability, negative equity of –€74.5m company level and –€102m group level.

From then to today not much changed, if one looks at current results. The situation was not reversed even though ELTA were allowed to keep their competitive advantage as the universal service provider until 2028 — meaning they must deliver mail everywhere in Greece, with affordable prices, maintaining branches even in remote areas — even if loss-making.

“Wait until 2026”, the current ELTA management says, setting that year as milestone when the group is expected to return to improved financial results — and we shall see. What until then? The plan for exploitation/utilization of ELTA real estate (portfolio total commercial value ≈ €120m, assigned to Alpha Real Estate Services – EY) will have progressed — leasing, commercial exploitation and possible sale of some assets. And by then, the modernization plan of ELTA, which restarted two years ago, is expected to have delivered results and helped return to positive equity. So far — it has not achieved what was expected.