2015/08/20
The Canada Post segment reported a loss before tax of $31 million for the second quarter of 2015, as Transaction Mail volumes fell faster in the first half of the year than in any comparable period since volumes peaked in 2006.
The results were also due to higher employee benefit expenses and partially offset by continued strong growth in the Parcels business.
Transaction Mail volumes fall sharply
Transaction Mail volumes fell by 102 million pieces or 7.2 per cent in the first two quarters of 2015.
This ongoing volume erosion reflects Canadians’ changing needs for postal service.
Transforming our business
We need to outpace the decline in Transaction Mail by completing all the initiatives set out in the Five-Point Action Plan, which will achieve substantial operational savings, and we need to grow our business.
Our e-commerce business continues to grow. Reliable on-time parcel delivery and the innovative solutions we provide for online retailers and customers continue to produce solid growth in our Parcels business.
And we are working hard to grow our Direct Marketing business, which accounts for about one fifth of all the revenue generated by the Canada Post segment. It is a pillar of our growth strategy.
Key results for the Canada Post segment compared to Q2 2014
Transaction Mail
• Revenue fell by $44 million or 5.4 per cent to $779 million
• Volumes fell by 63 million pieces or 6.5 per cent
Parcels
• Revenue rose by $17 million or 4.8 per cent to $370 million
• Volumes increased by more than two million pieces or 6.5 per cent
Direct Marketing
• Revenue fell by $12 million or four per cent to $297 million
• Volumes fell by 17 million pieces or 1.3 per cent
Employee benefit expenses: Significant volatility in employee benefit expenses continues to pose a sizeable financial risk to Canada Post. Costs rose by $59 million in the second quarter mainly because the discount rates used to calculate benefit plan costs declined. Employee benefit expenses are expected to remain higher throughout 2015 than they were in 2014.
• Read the news release or consult the 2015 Q2 report for full details.