Canada Post has underlined the need to restructure its business after remaining in the red in thesecond quarter of this year due to falling mail volumes and with weaker results from parcels
subsidiary Purolator.The Canada Post Group, covering the core brand mail operator, Purolator and other businesses,reported a pre-tax loss of C$10 million in the April – June 2012 second quarter on revenues up 3.6per cent at $1.85 billion compared to an $18 million loss in Q2, 2011. The group made a half-yearloss of $13 million compared to a small $4 million profit in H1, 2011, with half-year revenues 1.9per cent higher at $3.8 billion.
But the state-owned corporation stressed year-on-year comparisons “minimised the severity ofthe continuing volume decline and the resulting pressure on the Canada Post segment’s revenue”because of the heavy impact of the June 2011 strike on last year’s figures.
The group commented that the financial losses “add impetus to the need for Canada Post totransform its business and to address its labour costs without delay”. It also faces a largepensions deficit.
Canada Post, the core mail, parcel and digital delivery business, made a pre-tax loss of $34million in the second quarter and $23 million in the first half-year. This was largely due to a 4.4per cent fall in Q2 domestic letter volumes which generate the bulk of revenues. Letter volumesdropped 4.8 per cent and direct mail volumes were flat. Operating revenues were 4.8 per cent higherat $1.4 billion in the second quarter and were up 1.4 per cent at $3 billion over the half-year.
More positively, Canada Post said it “aggressively” pursued its parcel growth strategy byfocusing on the fast-growing e-commerce segment. Parcel revenues increased 21 per cent to $302million in the second quarter, and grew 8.7 per cent to $621 million over the half-year as volumesincreased by 9.8 per cent.
Purolator generated stable revenues of $416 million in Q2 but its pre-tax profit dropped 15per cent to $20 million. Over the half-year, its revenues were 2.6 per cent higher at $814 millionbut pre-tax profits were 45 per cent lower at $9 million.
