Postal operator Canada Post recorded a loss before tax of C$129m (US$102m) in the period between January 1 and March 30, 2022.
The segment’s loss before tax deepened by C$52m (US$41m), or 67.7%, compared with the same period in 2021. Revenue for the Canada Post segment fell by C$120m (US$95m), or 6.11%, between January 1 and March 30, 2022, compared with the same period in 2021. The largest component of this decline is due to lower volumes of parcels than in the same period of 2021, when many physical stores were closed due to Covid-19. Transaction mail revenue and volumes also decreased from the prior year, while direct marketing revenue and volumes increased.
The cost of operations decreased by C$77m (US$61m), or 2.3%, between January 1 and March 30, 2022, compared with the same period in 2021. Labor costs decreased by C$34m (US$27m) in 2022 due to a drop in parcel volumes and one less paid day compared with 2021, while employee benefits cost decreased by C$85m (US$67m) due to an increase in discount rates. These were partly offset by higher transportation and facilities costs, as well as increased spending to sustain the corporation’s network and improve its capacity.
With changes in the demand for mail services in all parts of the country, the corporation is responding by investing to expand capacity, improve service and update its operations. Financial self-sustainability remains the corporation’s medium- to long-term goal while the company’s stated focus is on the investments and improvements needed to meet the changing needs of Canadians and support businesses of all sizes.
For the first quarter of 2022, parcels revenue declined by C$92m (US$73m), or 9.6%, while volumes fell by 23 million pieces, or 23.1%, compared with the same period in 2021, when volumes were at exceptionally high levels due to post-holiday online shopping and returns when stores were closed due to Covid-19. Limited inbound air transportation capacity and global supply chain issues also negatively impacted parcel volumes and revenue during the first quarter of 2022.
For the first quarter of 2022, transaction mail revenue fell by C$36m (US$28m), or 5.0%, as volumes declined by 65 million pieces, or 9.1%, compared with the same period in 2021. Transaction mail continued to erode in the quarter as consumers and mailers migrate to digital communications. Restricted air transportation also negatively affected revenue during the quarter. Revenue was also affected as, due to Covid-19, the corporation has kept regulated stamp prices at 2020 levels.
Direct marketing continued to recover from the impact of customers postponing or canceling marketing campaigns, which had begun early in the pandemic. Between January 1 and March 30, 2022, Direct marketing revenue grew by C$18m (US$14m), or 8%, as volumes increased by 66 million pieces, or 7.6%, compared with the same period in 2021. While Canada Post’s Personalized Mail and Neighbourhood Mail products continued to recover in the period with the broad return to in-person shopping, some businesses closed or faced capacity restrictions due to Covid-19, reducing the demand for marketing campaigns.
The Canada Post group of companies recorded a loss before tax of C$100m (US$79m) in the first quarter of 2022, compared with a loss before tax of C$19m (US$15m) in the same period a year earlier. Purolator’s profit before tax of C$28m (US$22m) in the quarter fell by C$23m (US$18m), or 45.9%, from C$51m (US$40m) in the same period of 2021.