Canada Post segment records a loss before tax of $490 million in 2021

Canada Post’s 2021 results have been released. Canada Post recorded a loss before tax in 2021 as revenue growth across all lines of business were partially offset by increased costs.

The full story of 2021 includes how we made strong early progress in fulfilling our purpose, A Stronger Canada – Delivered, and is in our 2021 Annual Report on canadapost.ca. Here you will also find a message from Doug Ettinger, President and CEO on our plans to deliver a stronger Canada.

The Canada Post segment’s loss before tax was $490 million in 2021. That’s an improvement from a loss before tax of $779 million in the prior year.

Revenue for the Canada Post segment increased by $407 million, or 6.3 per cent, in 2021 compared to the prior year. Compared to 2020, Parcels revenue grew, Transaction Mail revenue increased slightly, and Direct Marketing revenue and volumes started to recover toward pre-pandemic levels. Year-over-year comparisons are affected by COVID-19: in 2020, Direct Marketing and Transaction Mail volumes had declined substantially while Parcels volumes had increased significantly.

Cost of operations increased by $127 million, or 2.0 per cent, in 2021 compared to the prior year.

With sustained and elevated demand for parcel delivery across the country, we’re responding by investing to expand capacity, improve service and innovate operations. Financial self-sustainability remains our medium- to long-term goal, while our immediate focus must be on the critical investments and improvements needed to meet the changing needs of Canadians and support businesses of all sizes.

Here are the detailed results, compared to 2020:

Parcels

• In 2021, Parcels revenue increased by $238 million, or 7.4 per cent.
• Volumes fell by 28 million pieces, or 7.0 per cent, compared to a year when volumes had surged.
• Revenue results were positively affected by proactively managing use of available capacity through our commercial customer and product mix.

Transaction Mail

• Transaction Mail revenue grew by $10 million, or 0.8 per cent, partly due to federal election and census mailings in 2021.
• Volumes fell by 62 million pieces, or 2.0 per cent.
• Despite revenue growth from these mailings, erosion in Transaction Mail continues as consumers and mailers migrate to digital alternatives.

Direct Marketing

• Revenue grew by $113 million, or 14.4 per cent, and volumes increased by 595 million pieces, or 18.4 per cent.
• This was a partial recovery, following significant declines in the prior year, when customers had postponed or cancelled marketing campaigns due to COVID-19.

For more details, see the news release.

2022/05/04

Canada Post segment records $264-million loss before tax in third quarter

Canada Post recorded a loss before tax of $264 million in the third quarter, a slight improvement compared to the same period a year earlier.

While the first half of 2021 showed strong revenue growth from all lines of business, it slowed slightly in the third quarter as consumers returned to shop in stores.

Revenue increased by $37 million, or 0.8 per cent, in the third quarter and by $501 million, or 8.5 per cent, in the first three quarters of the year, compared to the same periods a year earlier. Year-over-year comparisons are affected by the impacts of COVID-19. In the third quarter of 2020, Direct Marketing and Transaction Mail volumes declined substantially, while significant and unsustainable parcel volume growth was constrained by available capacity.

Costs of operations increased by $32 million, or 1.8 per cent, in the third quarter of 2021 and by $275 million, or 3.3 per cent, for the first three quarters, compared to the same periods a year earlier. These increases were driven by annual wage increases and higher costs of processing and delivering parcels compared to mail. The Corporation also invested in operations and capacity.

Below are some key results for Q3 compared to the same period last year:

Parcels:

• • Volumes fell by 20 million pieces, or 22.1 per cent.
• • Revenue declined by $31 million, or a more modest 5.3 per cent, due in part to our strategies to manage customer and product mix within our available capacity.
• • The reopening of stores for in-person shopping negatively impacted demand, while global supply chain issues affected inbound volumes.

Transaction Mail:

• • Revenue grew by $21 million, or 2.4 per cent, and volumes rose by 8 million pieces. .
• • This was partly due to federal election mailings.
• • Despite these mailings, erosion in Transaction Mail continues as consumers and mailers migrate to digital alternatives.

Direct Marketing:

• • Direct Marketing revenue grew $42 million, or 20.3 per cent, and volumes rose by 184 million pieces, or 21.1 per cent.
• • This partial recovery followed significant declines in 2020, when customers mailed less due to COVID-19.

For more details, see the news release.

2021/11/19

Canada Post segment reports $151 million loss before tax in second quarter

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:

Parcels:

• • 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.

Transaction Mail:

• • 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 Marketing:

• • 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.

2021/08/20

Canada Post segment reports pre-tax loss of $77M for Q1 2021

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.

2021/05/21

Canada Post segment reports $779-million loss before tax for 2020

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.

2021/04/30