August 23, 2019

Posted in News Releases

Canada Post segment reports $50-million loss before tax in second quarter

Growth in parcels volumes and revenue slowed compared to the first two quarters of 2018

August 23, 2019

Posted in News Releases

OTTAWA – The Canada Post segment recorded a loss before tax of $50 million for the second quarter of 2019, as continuing declines in mail volumes were offset by parcels volumes growth that was more modest than the significant growth rates of a year ago.

Comparisons of the loss before tax for the quarter and year to date (ending June 29, 2019) to 2018 are affected by last year’s significant one-time costs related to pay equity for Rural and Suburban Mail Carriers (RSMC). For that reason, the segment’s loss before tax in the first two quarters of 2019 decreased by $148 million compared to the same two quarters last year. Revenue fell by $1 million in the second quarter compared to the same period of 2018, and fell by $27 million for the first two quarters compared to last year.

Parcels results

In the Parcels business, volume growth continued to be modest through the first two quarters, compared to a year ago. Parcels revenue increased by $31 million or 6.7 per cent1 and volumes increased by 6 million pieces or 8.8 per cent in the second quarter compared to the same period in 2018. Revenue in Domestic Parcels, the largest product category, also increased by $32 million or 8.8 per cent while volumes increased by 5 million pieces or 10.5 per cent. In the first two quarters of 2019, Parcels revenue increased by $51 million or 5.1 per cent, and volumes rose by 7 million pieces or 5.7 per cent, compared to the first two quarters in 2018. Revenue for Domestic Parcels in the first two quarters increased by $72 million or 9.1 per cent and volumes by 11 million pieces or 12.4 per cent, compared to the first two quarters of 2018.

Transaction Mail results

Transaction Mail is mostly letters, bills and statements. These volumes fell by 55 million pieces or 5.7 per cent in the second quarter and revenue fell by $16 million or 0.8 per cent, compared to the second quarter of 2018. In the first two quarters of 2019, Transaction Mail volumes decreased by 123 million pieces or 7.0 per cent and revenue decreased by $47 million or 2.4 per cent, compared to the same period in 2018. While its impact in the first two quarters was partially offset by a regulated rate increase for LettermailTM, the ongoing decline in mail volumes remains a significant financial challenge.

Direct Marketing results

In the second quarter of 2019, Direct Marketing volumes decreased by 73 million pieces or 4.1 per cent, while revenue decreased by $11 million or 2.2 per cent compared to the same period in 2018. In the first two quarters of 2019, Direct Marketing volumes decreased by 143 million or 5.2 per cent, while revenue decreased by $28 million or 4.3 per cent compared to the same period in 2018.

Group of Companies results

The Canada Post Group of Companies2 reported a profit before tax of $11 million in the second quarter, an increase of $202 million compared to a loss before tax of $191 million3 in the same period in 2018. The main factor in the return to profitability was the significantly lower loss in the Canada Post segment compared to the second quarter of 2018, which had included one-time costs for employee benefits resulting from the pay equity ruling. For the first two quarters of 2019, the Group of Companies recorded a profit before tax of $50 million, an increase of $147 million compared to a loss before tax of $97 million in the first two quarters of 2018. The Purolator segment recorded a net profit before tax of $52 million in the second quarter of 2019, up $6 million compared to a $46 million profit before tax in the second quarter of 2018. For the first two quarters of 2019, Purolator’s profit before tax was $64 million, which compares to a $66 million profit before tax for the same period in 2018.

Visit Financial Reports for the full report.

Background

The operations of the Canada Post Group of Companies are funded by the revenue generated by the sale of its products and services, not taxpayer dollars.

  1. All per cent values in this news release have been adjusted for trading days. In the second quarter and first two quarters of 2019, there was one less trading day than in the same periods of 2018.
  2. The Canada Post Group of Companies consists of the core Canada Post segment and its three non-wholly owned subsidiaries, Purolator Holdings Ltd., SCI Group Inc. and Innovapost Inc.
  3. All 2018 amounts for the Group of Companies were restated as a result of new or revised accounting standards.

For more information:
Media Relations
613-734-8888
media@canadapost.ca