OTTAWA – Canada Post recorded a profit before tax of $23 million in the first quarter of 2019, as growth in its Parcels business continued, but only moderately due to the continued impact from major customers making other delivery arrangements last fall and into 2019.
Canada Post revenues totalled almost $1.7 billion in the first quarter – a decrease of $26 million or 1.5 per cent from the first quarter of 2018. The Corporation’s $23 million profit before tax in the first quarter, which ended March 30, was a $45 million decline compared to the same period a year earlier.1
The increases in Parcels revenue and volumes in the first quarter were significantly less than in the same period last year. Revenue increased by $20 million or 3.4 per cent and volumes increased by about 1 million pieces or 2.6 per cent, compared to the same period in 2018. Domestic Parcels, the largest product category, drove growth in this line of business, as revenue increased by $40 million or 9.4 per cent and volumes grew by 6 million pieces or 14.4 per cent, compared to the first quarter of 2018. The increases in revenue and volumes were driven by major commercial customers as well as the continued growth in e-commerce.
Transaction Mail results
Transaction Mail is mostly letters, bills and statements. In the first quarter of 2019, Transaction Mail volumes decreased by 68 million pieces or 8.1 per cent and revenue decreased by $31 million or 4 per cent, compared to the first quarter of 2018. For domestic LettermailTM, the largest product category, volumes decreased by 61 million pieces or 7.6 per cent, while revenue decreased by $22 million or 3.1 per cent compared to the same period a year earlier. This was despite a regulated increase in the postage rate for domestic Lettermail. The ongoing decline in mail volumes in the digital era remains a significant challenge.
Direct Marketing results
Direct Marketing revenue decreased by $17 million or 6.3 per cent in the first quarter of 2019, compared to the same period in 2018, while volumes decreased by 70 million pieces or 6.2 per cent. Canada Post Neighbourhood MailTM, the largest product category by volume, saw revenue decrease by $6 million or 6.2 per cent, while volumes decreased by 50 million pieces or 6 per cent compared to the same period a year earlier. Canada Post Personalized MailTM and Publications MailTM revenue declined by $8 million and $3 million respectively, while volumes decreased by 14 million pieces and 6 million pieces respectively. Direct Marketing revenue and volumes were also negatively affected by the labour disruption of 2018 as business customers reduced their marketing expenditures with Canada Post or redirected them to other media channels.
Group of Companies results
The Canada Post Group of Companies2 reported a profit before tax of $39 million for the first quarter of 2019, compared to a profit before tax of $94 million for the same period in 2018. The $55 million decrease in profit was largely due to the results of the Canada Post segment. Purolator’s profit before tax was $12 million in the first quarter, compared to a profit before tax of $20 million for the same period in 2018. Results for the Group of Companies can also be attributed in part to a softening of the Canadian economy in late 2018 and in early 2019.
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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 The amounts for 2018 were restated as a result of new or revised accounting standards.
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.
TM Trademarks of Canada Post Corporation
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