Canada Post recorded a loss before tax of C$107m (US$78m) in the first quarter of 2023 as parcels revenue was relatively flat and transaction mail and direct marketing revenue declined.
The Canada Post segment’s loss before tax in the first quarter was a C$22m (US$16m) improvement on the loss before tax of C$129m (US$95m) in the same period of 2022. Revenue fell by C$32m (US$23m), or 1.7%, compared to the same period of 2022. Parcels revenue was relatively flat as volumes declined slightly from the same period of the prior year. Direct marketing revenue and volumes fell as businesses continued to pull back on marketing. Transaction mail revenue and volumes continued to erode.
In the first quarter of 2023, the cost of operations fell by C$34m (US$25m), or 1.7%, compared to the same period of 2022. Canada Post reports that this was “due to lower employee benefits which were partly offset by higher non-capital investment costs”.
With parcels representing approximately half of Canada Post’s revenue, the corporation is investing to improve service and tracking, enable its network, increase capacity and enhance the customer experience. In the first quarter, parcels revenue increased by 0.2%, or C$1m (US$700,00), compared to the same period a year earlier, as volumes fell by 7.6%, or five million pieces. The competitive landscape continued to have an impact on the parcels business as low-cost new entrants and rate-shopping platforms have disrupted the package delivery sector. A softer e-commerce market related to lower consumer spending also affected volumes.
Transaction mail revenue fell by 2.7%, or C$18m (US$13m), compared to the first quarter of 2022, as volumes declined by 3.4%, or 23 million pieces. Consumers and mailers continued to shift to digital channels. The corporation maintained regulated stamp prices at 2020 levels, which also negatively affected revenue in the quarter.
In the first quarter, direct marketing revenue declined by 4.5%, or C$11m (US$13m), as volumes decreased by 5.5%, or 52 million pieces. General economic uncertainty continued to impact volumes and revenue as businesses pulled back on marketing.
The Canada Post group of companies recorded a loss before tax of C$58m (US$42m) in the first quarter of 2023, compared to a loss before tax of C$100m (US$73m) in the same period a year earlier. Courier Purolator’s profit before tax of C$46m (US$22m) in the quarter increased from C$28m (US$20m) in the same quarter of the prior year. SCI’s first-quarter profit before tax of C$3m (US$2.2m) rose from C$2m (US$2.5m) for the same period the previous year.
The Canada Post group of companies’ operations are funded by revenue generated by the sale of its products and services, not taxpayer dollars. The Canada Post group of companies consists of the core Canada Post segment and its three non-wholly owned subsidiaries, Purolator Holdings, SCI Group and Innovapost.
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