Canada Post made $27m loss in first quarter
Canada Post Group made a pre-tax loss of $37m in the first quarter of the year, it revealed yesterday. The result would have been slightly better than last year’s first quarter, except that the pre-tax profit of $51m made in the first quarter of 2013 was supported by a one-off $109m gain from the sale of the company’s mail processing facility in central Vancouver.
The Group’s total revenue fell 3% year-on-year to $1.47bn.
The core mail business, Canada Post, made a $27m pre-tax loss in the first quarter as transactional mail volume dropped by 6.9% year-on-year as more Canadians switched to electronic communications for their bills and statements.
The company’s transactional revenue fell by $50m in the quarter, or 6%, as a result of the decline of 79m pieces.
Canada Post said its new tiered pricing structure for letter mail, which came into effect at the end of March, should improve matters concerning transactional mail. Direct mail revenue also fell, by 4.9%, with volumes down 3.2% year-on-year, with the company again blaming digital alternatives.
Domestic parcel volumes grew 4.9% year-on-year, pushing parcel revenue up $23m or 7.1% in the quarter thanks to the “fast-growing” online retail sector.
Canada Post’s Purolator parcel business made a $9m net loss in the first quarter, similar to the performance the same period last year, on a revenue that increased by $7m or 1.2% to $386m.
Canada Post said it has begun its “five-point plan” to address its financial losses through initiatives including the move from doorstep delivery to community mailboxes. The first 11 communities will make the switch this autumn.
The company’s business plan for the 2014 year as a whole forecasts a $274m loss for the 12 months.