Canada Post reports higher profits than expected

Canada Post delivered a higher profit than expected for 2003, sending some of it back to its only shareholder, the federal government.

The corporation reported net income of D253 million for the last year — about four times the D58 million it expected, Canada Post said Friday in its annual report.

This marks the Crown agency’s ninth consecutive annual profit. From that it said it expects to pay a dividend of $63 million to the federal government this year.

That’s considerably more than the $18 million it paid to Ottawa last year, the corporation said.

The results are particularly strong given the tough times the economy endured in 2003, said Vivian Albo, chair of the Canada Post board of directors.

“The SARS outbreak, the war in Iraq, the blackout in Ontario, forest fires in Alberta and British Columbia, the outbreak of mad cow disease and the hurricane in Nova Scotia had a serious impact on the Canadian economy,” she said in a statement.

“That Canada Post Corporation succeeded in these challenging conditions is an enormous credit to the organization.”

The report says postal operations accounted for about 81 per cent of the income for the corporation while its Purolator courier operation contributed about 16 per cent.

Purolator recorded a net income of $43 million, an increase of D16 million in 2002.

The courier service has become controversial as rivals contend it has an unfair advantage as a Crown agency over private-market delivery firms.

Much of the jump in Canada Post income came from settling international accounts and changes to benefit plans.

But even if those items were excluded, the corporation says it would still have beaten its profit target by 14 per cent for a net income of D66 million.

The report also noted that Canada Post processed 10.7 billion pieces of mail last year.

Because of population growth, it also added about 240,000 new points of delivery which increased the cost of postal services by more than D25 million.