Canada Post recorded a loss before tax of $66 million in the first quarter of 2020, as continued growth in Parcels revenue and volumes was not enough to offset increased costs. Ongoing declines in Transaction Mail and Direct Marketing also contributed to the loss.
The increase in costs was mainly due to higher labour and employee benefits, and increased collection, processing and delivery costs from Parcels growth.
The first quarter ended on March 28, 2020, before COVID-19 had a significant impact on our Parcels business. With parcel volumes rapidly increasing and Transaction Mail and Direct Marketing volumes quickly decreasing, COVID-19 is expected to have a larger impact on the business in the second quarter.
Key results for the Canada Post segment in Q1 2020 compared to Q1 2019
- In Q1, when the impact of COVID-19 on the Parcels business was minimal, volumes increased by 4 million pieces or 6.1 per cent and revenue increased by $53 million or 10.4 per cent.
Transaction Mail results
- Volumes fell by 30 million pieces or 2.2 per cent and revenue decreased by $16 million or 0.6 per cent. Ongoing erosion accelerated toward the end of Q1 as many businesses began operating on an online-only basis due to COVID-19.
Direct Marketing results
- Volumes decreased by 126 million pieces or 10.5 per cent and revenue decreased by $26 million or 8.6 per cent.
- Declines in Direct Marketing revenue and volumes were larger than in the first quarter of 2019 due to COVID-19, as marketing campaigns were delayed or cancelled near the end of the quarter.