Canada Post recorded a loss before tax of $151 million in the second quarter of 2021, an improvement of $227 million from the $378-million loss before tax in the same quarter a year earlier.
While this improvement was significant, it resulted mainly from the unique unfavourable effects of COVID-19 on the business as well as one-time charges in 2020.
Revenue increased by $188 million, or 11.5 per cent, in the second quarter and by $464 million, or 12.2 per cent, in the first six months of the year, compared to the same periods a year earlier. Continued parcel revenue growth, increased Transaction Mail volume linked to the 2021 Census and stronger Direct Marketing volumes helped drive this revenue growth. Year-over-year growth rates in each product line reflect the impact of COVID-19 in 2020, which included significant declines in Transaction Mail and Direct Marketing but also soaring parcel volumes.
Costs of operations decreased by $44 million, or 2.2 per cent, in the second quarter of 2021 and increased by $243 million, or 4.1 per cent, for the year-to-date of 2021, compared to the previous year. The accelerated shift in our business from mail to parcels continues to put pressure on our capacity, processing and delivery costs.
Below are some key results for Q2 compared to the same period last year:
- • Volumes declined by 5 million pieces, or 5.4 per cent.
- • Revenue grew by $52 million, or 6.1 per cent.
- • Revenue results were positively affected by proactively managing use of available capacity through our commercial customer and product mix.
- • Compared to a year earlier when online shopping surged, results in Q2 2021 began to reflect the return to in-person shopping.
- • The 2021 Census mailing contributed to revenue growth for the business line.
- • Transaction Mail revenue increased by $43 million, or 7.5 per cent.
- • Volumes increased by 25 million pieces, or 4.1 per cent.
- • Overall, Transaction Mail revenue continues to erode as consumers and mailers migrate to digital alternatives.
- • Direct Mail started to recover in Q2, following significant declines in Personalized Mail and Neighbourhood Mail in 2020 as customers postponed or cancelled marketing campaigns due to COVID-19.
- • Revenue increased by $72 million, or 49.1 per cent.
- • Volumes increased by 375 million pieces, or 66.1 per cent.
For more details, see the news release.
Canada Post’s first quarter 2021 financial results were released today. In the first quarter, the pandemic continued to impact our operations, with higher costs offsetting higher revenue from the Parcels business.
While the Canada Post segment recorded a loss before tax of $77 million, revenue for the segment increased by $276 million, or 12.8 per cent, from the same period of the previous year. The year-over-year comparisons are affected by the fact the Corporation only began to see impacts from COVID-19 toward the end of the first quarter of 2020.
Operating expenses rose by $287 million compared to the first quarter of the previous year, in part due to additional expenditures for special leaves to support child and elder care, additional health and safety supplies, increased overtime expenses and wage increases. Growing parcel volumes also continued to mean higher costs for collection and parcel processing and delivery.
Transaction Mail and Direct Marketing continued to decline as marketers cancelled or delayed mailings and shifted to digital channels. Transaction Mail volumes fell by 29 million pieces, or 6.9 per cent, from the same quarter a year earlier, as revenue declined by $10 million or 4.4 per cent. Direct Marketing revenue fell by $14 million, or 8.8 per cent, from the same quarter a year earlier, as volumes declined by 62 million pieces, or 9.7 per cent.
The Parcels business continued to show strong gains, with revenue growth more than offsetting revenue declines in Transaction Mail and Direct Marketing. Total Parcels revenue increased $286 million, or 38.4 per cent, from the same period a year earlier, as total volumes rose by 23 million pieces or 27.3 per cent.
For more details, see the news release.
Canada Post 2020 financial results were released today.
In an unprecedented year dominated by COVID-19, Canada Post recorded a loss before tax of $779 million in 2020, as it worked hard to keep people safe while maintaining an essential service for Canadians.
Costs related to COVID are estimated at $292 million. A significant portion of that was due to special leaves to support higher-risk employees and those providing child and elder care, as well as increased overtime expenses.
The additional expenses to keep people safe included the cost of redesigning work centres to accommodate physical distancing in our facilities, and for collection, processing and delivery, which increased along with Parcels volumes.
Transaction Mail revenue declined by $230 million and Direct Marketing revenue fell by $257 million, compared to 2019, as marketers cancelled or delayed mailings due to COVID-19 and mailers increasingly turned to digital alternatives. It is estimated that $382 million of that total $487 million revenue decline was due to COVID-19. The estimated net negative impact of COVID-19 was $194 million, after factoring in the growth of Parcels revenue.
Apart from the costs related to COVID-19, the company incurred an additional $127 million in costs stemming from the June 2020 arbitrator’s ruling that resulted in new collective agreements with the Canadian Union of Postal Workers. The segment would have still incurred a loss without the impacts of COVID-19 and the new collective agreements with CUPW.
Total Parcels revenue grew by $699 million, or 25.0 per cent, and total volumes grew by 69 million pieces, or 21.0 per cent, compared with 2019. It is estimated that $471 million of that increase is due to COVID-19. Domestic Parcels revenue increased by $613 million, or 29.1 per cent, and volumes increased by 70 million pieces, or 30.9 per cent, compared with 2019.
For more details, read the news release.
Canada Post recorded a loss before tax of $265 million in the third quarter of 2020, mainly due to declines in revenue from Transaction Mail and Direct Marketing and to higher costs. While Parcels revenue continued to grow in the quarter, it was not enough to offset these other contributing factors.
For the first three quarters, which ended September 26, 2020, the Canada Post segment recorded a loss before tax of $709 million on revenue of $4.9 billion. That compares to a loss before tax of $162 million, on revenue of $4.8 billion, for the first three quarters of 2019.
COVID-19 is estimated to have had a net negative impact of $188 million on before-tax results for the first three quarters of 2020. However, the segment would have posted a loss even without the impact of COVID-19 and the added costs from the June 2020 arbitrator’s ruling that resulted in new collective agreements with the Canadian Union of Postal Workers.
Key results for the Canada Post segment in Q3 2020, compared to Q3 2019
- Parcels revenue grew by $186 million, or 30 per cent.
- Volumes grew by 22 million pieces or 31.1 per cent.
- Over the first three quarters of 2020, Parcels revenue increased by $465 million, or 25.5 per cent, and volumes by 52 million pieces, or 24.5 per cent.
- Transaction Mail revenue dropped $52 million, or 8.8 per cent.
- Transaction Mail volumes fell by 72 million pieces, or 11.5 per cent.
- Over the first three quarters of 2020, revenue fell by $172 million, or 8.1 per cent, and volumes fell by 204 million pieces, or 9.2 per cent.
- Direct Marketing revenue declined by $60 million, or 24.1 per cent.
- Volumes fell by 269 million pieces, or 25.3 per cent.
- Over the first three quarters of 2020, revenue dropped by $212 million, or 26.9 per cent, and volumes by one billion pieces, or 31.0 per cent.
For more details, read the news release.
Canada Post recorded a loss before tax of $378 million in the second quarter of 2020. This increased loss was largely due to the significant impact COVID-19 had on revenue and costs, combined with added costs from the June 2020 arbitrator’s ruling that gave us new collective agreements with the Canadian Union of Postal Workers (CUPW).
In this CEO Update and video message, Doug Ettinger provides his thoughts on the second-quarter results and what it means for employees and the company.
With people at home and businesses closed, we saw a dramatic shift in what we were asked to deliver. Online shopping drove unprecedented growth in Parcels volume and revenue, but Transaction Mail and Direct Marketing volume and revenue declines exceeded the growth in Parcels. The estimated total revenue shortfall due to COVID-19 was $46 million. In addition, Canada Post’s costs related to COVID-19 increased by an estimated $118 million. The total negative financial impact due to COVID-19 was an estimated $164 million.
Although COVID-19 and the new collective agreements with CUPW contributed to the loss, the Canada Post segment would have still incurred a loss without these factors.
Key results for the Canada Post segment in Q2 2020 compared to Q2 2019:
- Early in the second quarter, Parcels volumes were as high as in past peak Christmas seasons. With physical stores closed due to COVID-19, Canadians shopped significantly more online.
- Volumes grew by 26 million pieces or 35.5 per cent
- Revenue grew by $226 million or 35.4 per cent
Transaction Mail results:
- Ongoing revenue and volume declines accelerated as businesses and Canadians used digital alternatives even more during COVID-19.
- Volumes fell by 102 million pieces or 14.7 per cent
- Revenue decreased by $104 million or 15.4 per cent
Direct Marketing results:
- Customers were already delaying or cancelling marketing campaigns due to COVID-19 as the quarter began, adding to the impact of ongoing digital substitution.
- Volumes fell by 652 million pieces or 53.4 per cent
- Revenue declined by $126 million or 46.4 per cent