Canada Post released its financial results for the first quarter of 2016 today. Continued strength in Parcels contributed to a $44-million profit before tax for the Canada Post segment, the country’s No. 1 parcel company.
Transaction Mail volumes fell by 83 million pieces compared to the same period in 2015 and remain a significant challenge. Direct Marketing generated revenue of $286 million for the first quarter of 2016 for the Canada Post segment.
Parcels’ growth and Direct Marketing represent opportunity, but will not be enough to offset the decline in the core Lettermail business and pay for the pension, or allow the Corporation to invest in its network and customer service. Therefore, this growth will not be enough to ensure Canada Post’s long-term financial self-sustainability.
Key results for the Canada Post segment compared to Q1 2015
- Revenue grew 12.5 per cent or $41 million to $421 million.
- Volumes rose by 14.4 per cent or more than 5 million pieces.
- Volumes in Domestic Parcels, the largest product line, increased by 20.5 per cent.
- Volumes fell by 6.6 per cent
- Revenue declined by three per cent or $40 million to $849 million.
- Since the beginning of 2015, mail volumes have fallen by nearly one third of a billion pieces.
- Volumes fell by 2.6 per cent or 50 million pieces.
- Revenue decreased by 3.5 per cent or $15 million to $286 million, although Neighbourhood Mail revenue remained relatively flat.
Employee benefit expenses: Employee benefit costs, including pension, continue to be volatile and remain a significant challenge. Expenses fell by $19 million due to a slight increase in the discount rates used to calculate benefit plan costs in 2016, as well as positive pension asset returns in 2015.