Canada Post segment records $60m Q3 loss
The Canada Post segment lost $60m before tax in the third quarter (Q3) of this year – compared to a loss of $13m in Q3 2015. In a statement posted on Friday (25 November), Canada Post emphasised that this was a period “when the risk of a work disruption prompted commercial customers to make other arrangements to deliver their parcels and mail”.
The Canada Post statement continued: “The net financial impact of the labour uncertainty is estimated at $100 million for the third quarter. That figure reflects the significant reduction in revenue but also includes slightly lower costs, such as less use of overtime and temporary employees, because volumes had declined sharply in all lines of business.
“The Corporation and the Canadian Union of Postal Workers reached tentative agreements on August 30, 2016, but volumes took much longer to recover.
“Employee benefit expenses were also lower in the third quarter due to a $44-million non-cash one-time gain, resulting from the new collective agreement with the Canadian Postmasters and Assistants Association (CPAA) in August 2016.”
The labour uncertainty meant that Canada Post’s Parcels sector – which has been the key growth area – actually saw a decline for the first time since Q1 2014. Parcels revenue in Q3 fell by $30m or 7.9% while volumes declined by 2 million pieces (or 5.2%) compared to last year.
As previously reported, the Canadian government is currently undertaking an in-depth review of Canada Post’s operations, with a view to reducing costs and driving up profitability.