Canada Post Earns Seventh Consecutive Profit

In its 2001 Annual Report tabled today in
Parliament, Canada Post Corporation reported a net income of $67 million on
revenues of $4.4 billion for the fiscal period ended December 31, 2001. That's
an increase of $30 million from the $37 million recorded in the comparative
period a year ago. The Corporation changed its fiscal year end from the last
Saturday in March to the last day in December, resulting in a nine-month
fiscal period from April 1, 2001 to December 31, 2001.
"I am very encouraged by Canada Post's success," said the Honourable John
Manley, Deputy Prime Minister and Minister Responsible for Canada Post
Corporation. "The global economy is in the midst of rapid change as consumers,
government and industry adjust to the technological advances in service
delivery. Canada Post is a world leader among postal administrations that are
changing the manner in which they do business in order to serve their
customers effectively and remain relevant in this new marketplace.
"Canada Post's vision is to be a world leader in providing innovative
physical and electronic delivery solutions, creating value for its customers,
employees and all Canadians," added Mr. Manley.
"This is the seventh consecutive year of profitability for Canada Post,"
said Vivian Albo, Chairman of the Board of Directors. "This solid performance
is a tribute to Canada Post's dedicated employees and management team as it
was accomplished during the difficult economic challenges that characterized
this fiscal period. With its proven track record of success, the Corporation
has charted a course that will ensure it remains a key contributor to Canada's
continued prosperity."
On a consolidated basis, Canada Post's revenues reached $4,441 million
for the nine-month fiscal period, an increase of 1.1% or $47 million over the
comparative period a year ago. Consolidated net income for the period was
$67 million, an increase of $30 million from the $37 million reported in the
previous comparative period.
The Honourable André Ouellet, President and Chief Executive Officer for
the Corporation, said it is well known that a company's success largely
depends on the level of satisfaction of its employees. "Therefore, I am
equally proud of both our profit as well as the marked increase in our
employee satisfaction index," said Mr. Ouellet. "Satisfaction levels have
climbed to 70 per cent, an unprecedented increase of nine points since the
last survey a year ago. This is a remarkable accomplishment and a testament to
the dedication and perseverance of our workforce."
In the 2001 fiscal period, Canada Post processed 7.3 billion pieces of
mail, a 0.5% decrease from the same period the previous year, and achieved an
on-time combined service performance score of 96.4 per cent against a target
of 95.5 per cent. This represents a marked increase over the 94.3 per cent
reported for the previous 12-month period, particularly in light of the unique
challenges posed by new national security regulations following the events of
September 11, 2001 in the United States.
Canada Post's future success depends on high levels of confidence and
satisfaction among its customers and employees. "To remain successful, we must
be innovative, customer-focused and flexible, while striving to be first to
market with products that meet the needs of the new economy," said
Mr. Ouellet.
Canada Post also tabled today its 2002 to 2006 Corporate Plan summary,
its roadmap for the next five years.

Highlights of the 2001 Annual Report
————————————

– Canada Post changed its fiscal year end from the last Saturday in March
to the last day in December. This resulted in a nine-month fiscal
period from April 1, 2001 to December 31, 2001.
– Consolidated net income was $67 million for the fiscal period ended
December 31, 2001, an increase of $30 million from the $37 million
recorded in the comparative period ended December 31, 2000.
– Consolidated revenue from operations reached $4.441 million, an
increase of $47 million over the comparative period last year.
– Consolidated income from operations increased 70.5% or $50 million to
$120 million. Non-operating income increased to $12 million from
$7 million for the same period last year.
– A dividend of $21 million was paid to the shareholder, the Government
of Canada, an increase from $19 million paid in the comparative period
in 2000.
– Income taxes increased to $65 million from $40 for the comparative
period in the previous year.
– Purolator generated a net income of $10 million, a $32 million increase
from the comparative period in 2000.
– Canada Post processed 7.3 billion pieces of mail in the nine month
period, a 0.5% decrease from the comparative period ended December
2000.
– Properly prepared Lettermail achieved an on-time, combined service
performance score of 96.4%.
– Revenues from service offerings in the communications market
(Lettermail and hybrid Lettermail services) were $1,800 million, a
decrease of 0.3% over the comparative period.
– Operating revenues from the advertising market (Unaddressed Admail(TM),
Addressed Admail(TM)) was $532 million, an increase of 1.7% over the
same period last year.
– In the physical distribution market (Priority Courier(TM),
Xpresspost(TM), Expedited Parcel(TM), Regular Parcel(TM) and Progistix-
Solutions Inc.), revenues totaled $823 million, an increase of
$79 million or 12.9% compared to $744 million in the comparative
period.
– Canada Post's consolidated cost of operations for fiscal 2001 totaled
$4,321 million, a decrease of $3 million or 0.1% over the
$4,324 million recorded in comparative period.
– Consolidated labour costs represent the largest portion (60%) of these
operating expenses.
– In 2000/2001, Canada Post's return on equity ratio was 7.8%; its costs
as a percentage of revenues, 97.3%; and its operating profit margin,
2.7%.
– In 2001, Canada Post successfully negotiated a new collective agreement
with the 3,100 members of the Association of Postal Officials of
Canada. The new long-term agreement ensures both the well-being of the
employees and the efficient and economically sound operation of the
Corporation.
– Canada Post's investment activities totaled $284 million, which
included $205 million of acquisitions of property, plant and equipment
and $31 million spent on business acquisitions.
– In the 2001 fiscal period, Canada Post achieved an overall customer
satisfaction score of 78%.
– Employee satisfaction levels climbed to 70%, an unprecedented increase
of 9% since the last survey a year ago.