PCK posts Sh488 million profit after long-running rent dispute is resolved

A resolution of a long-running rent dispute has helped the Postal Corporation of Kenya (PCK) return to profitability, turning around its financial position for the year ended June 2025 after years of losses. The recovery was mainly supported by the recognition of billions of shillings owed by Huduma Kenya, which had remained unresolved for nearly a decade.

PCK posted a net profit of Sh488 million, reversing a Sh1.08 billion loss recorded in the previous financial year. This performance marks the strongest result for the corporation in more than 14 years, with the improvement largely linked to the inclusion of a long-outstanding payment from Huduma Kenya.

At the centre of the turnaround is Sh1.54 billion in rent arrears owed by Huduma Kenya for occupying PCK premises between 2013 and 2015. The amount had not been reflected in the corporation’s books for years due to a dispute over the liability, but it was later agreed upon after government-led mediation and formal confirmation.

“Huduma Kenya has been occupying PCK premises from the year 2013 to date. The amount recognised relates to the arbitrated agreed amount that has been signed by both parties. Revenue is measured based on the consideration to which the entity expects to be entitled in a contract with a customer,” said PCK.

The Sh1.54 billion was recorded as extraordinary income, contributing a large share of the corporation’s total revenue for the year. Overall revenue rose to Sh3.72 billion, up from Sh2 billion in the previous financial year, representing a strong increase driven mainly by the one-off settlement.

Core business operations also recorded steady gains. Revenue from mail services increased to Sh1.18 billion from Sh1.07 billion, while courier services rose to Sh762.6 million from Sh648.9 million. Rental income remained relatively unchanged at about Sh201 million.

Audit findings show that the settlement followed formal communication between government offices. A letter from the State Department for Public Service and Human Capital Development in August 2025 confirmed that Huduma Kenya owed PCK the disputed amount.

“Following this, Executive Office of the President vide letter Ref: OP.CAB 1/3 dated 9 September, 2025 based on the report of the Joint Mediation Committee relating to the matter, it was agreed an amount of Sh1.54 billion be paid to PCK as rent and utilities owed to them by Huduma Kenya,” states the audit.

The Treasury later reinforced the decision by issuing a directive requiring all accounting officers to prioritize settlement of debts owed to PCK.

Following the agreement, PCK and Huduma Kenya have formalised their arrangement through a lease agreement set for registration at the Ministry of Lands. The Treasury has also committed to providing an annual allocation of Sh194.3 million to cover future rent obligations.

Despite the improved financial outcome, operating costs increased to Sh3.23 billion from Sh3.08 billion. The rise was partly driven by a one-off impairment linked to two software systems that had remained incomplete for over ten years before being declared obsolete.

The corporation also reduced its workforce, closing the financial year with 2,062 employees compared to 2,342 in the previous period.