Canada Post’s parcel business continued to grow more slowly this year than in 2018 in the April – June quarter but the postal group’s overall results improved due to one-off effects.
The Canada Post segment (covering mail and parcels) recorded a loss before tax of C$50 million for the second quarter of 2019. This loss was C$148 million less than in the same period last year when the group had significant one-time costs related to pay equity for certain groups of delivery workers.
Revenue fell by 1.5% to C$1,644 million as continuing declines in mail volumes were largely offset by parcels volumes growth that was more modest than the significant growth rates of a year ago, according to the group.
In the Parcels business, volume growth continued to be modest through the first two quarters, compared to a year ago. This is largely a hangover from the loss of customers, especially for cross-border business with the US, during last autumn’s damaging strikes.
Canada Post noted in its Q2 report: “Parcel growth rates reported a year ago comparing 2018 to 2017 for the second quarter and the year to date were significantly higher. The Canadian e-commerce delivery market is highly competitive and some customers are now using a variety of carriers to manage their customers’ shipping needs.”
Quarterly parcels revenue increased by 6.7% to C$638 million as volumes grew by 8.8% to 74 million pieces. Revenue in Domestic Parcels, the largest product category, rose by 8.8% to C$478 million as volumes increased by 10.5% to 51 million pieces.
In contrast, Transaction Mail volumes fell by 5.7% in the second quarter but the revenue decline was held to just 0.8%. Direct Marketing volumes decreased by 4.1%, while revenue decreased by 2.2%, the Q2 results showed.
The Canada Post Group of Companies, including express parcels subsidiary Purolator, reported a profit before tax of C$11 million in the second quarter, an increase of C$202 million compared to a loss before tax of C$191 million in the same period in 2018. The main factor in the return to profitability was the significantly lower loss in the Canada Post segment compared to the second quarter of 2018.
Express parcels subsidiary Purolator recorded a net profit before tax of C$52 million in the second quarter of 2019, up C$6 million compared to a C$46 million profit before tax in the second quarter of 2018. Its turnover grew by 9.1% to C$485 million on higher volumes.
