Moscow: According to annual results released on Monday, the Russian state postal service experienced significant losses for the first time in nine years, largely as a result of logistical problems brought on by Western sanctions.

According to international financial reporting standards (IFRS), Russian Post experienced a cumulative loss of 30.4 billion rubles ($373 million) in 2022. The operating loss was 15 times greater than the $28.2 million profit realised in 2021, according to the data.

While operating costs increased 13.8% during the reporting period to reach 257.3 billion rubles ($3.15 billion), sales revenue decreased 3.1% last year to 221.2 billion rubles ($2.7 billion).

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According to the official figures, the loss from operating activities in 2022 was a record 32.6 billion rubles ($399 million), up from a profit of 4.7 billion rubles ($57 million) in 2021.

Russian Post stated in a news release earlier in March that the cost of logistics and equipment maintenance rose significantly in 2017. In the meantime, there has been a sharp decline in the flow of both incoming and outgoing international mail "due to the suspension of global brands in Russia, difficulties with payments, and transport restrictions."

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Russian Post's CEO, Mikhail Volkov, acknowledged that the past year has been difficult for the business because of a Western ban on using payment cards issued in Russia abroad, which has significantly decreased the amount of international trade.

Cross-border sales for the company fell by 11.4 billion rubles ($139 million).

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A 14 billion ruble ($171 million) investment in pay increases for both core staff, including operators, mail carriers, and sorters, as well as IT department employees was another factor in the losses.

Russian Post, which employs about 300,000 people, is still one of the biggest businesses in the nation.