Canada Post is reporting a first-quarter profit, driven by what the Crown corporation describes as “robust growth” in its parcels business, as it delivers Canadians’ online purchases.
The growth continues last year’s momentum, which saw Canada Post employees deliver record-setting parcels volumes, according to the first-quarter financial report for 2018. The Canada Post segment’s $70-million profit before tax for the first quarter, ended March 31, compares to a profit before tax of $50 million in the first quarter of 2017.
In the first quarter, Canada Post – the country’s No. 1 parcel company – grew parcels revenue by $110 million (or 24.6 per cent) while volumes increased by 17 million pieces (or 33 per cent) compared to the same period in 2017. Domestic parcels, the largest product category, continued to grow “strongly,” according to the Crown corporation, which saw revenue increase by $76 million (or 23.6 per cent) and volumes grow by six million pieces (or 17.3 per cent).
“The growth in parcels volumes was driven by strong performance from major commercial customers and by Canada Post’s solid delivery performance as consumers order more products online.”
Transaction mail includes letters, bills and statements, and in the first quarter of 2018, transaction mail revenue decreased by $46 million (or 4.1 per cent) while volumes decreased by 50 million pieces (or four per cent) compared to the same period in 2017.
For domestic lettermail – the largest product category – revenue decreased by $24 million (or 1.6 per cent) and volumes decreased by 34 million pieces (or 2.4 per cent).
“The ongoing decline in mail volumes is due to the growing use of digital alternatives by consumers and businesses. It is one of the most significant challenges facing the Corporation.”
In the first quarter of 2018, direct marketing revenue decreased by $3 million, which is an increase of 0.5 per cent when adjusted for trading days, while volumes fell by 23 million pieces (or 0.5 per cent) compared to the same period in 2017.
“Revenue for ‘Neighbourhood Mail,’ the largest volume product category, remained constant while volumes decreased slightly, by seven million pieces compared to the same period in 2017.”
GROUP OF COMPANIES
The Canada Post Group of Companies reported a profit before tax of $96 million compared to a profit before tax of $68 million in the same period in 2017.
The Group of Companies’ first-quarter results were primarily driven by positive results in the Canada Post segment that were largely due to parcel growth, according to the Crown corporation.
The Purolator segment’s profit before tax was $21 million for the first quarter of 2018 compared to a profit before tax of $14 million in the first quarter of 2017.
The operations of the Canada Post Group of Companies are funded by the revenue generated by the sale of its products and services—not taxpayer dollars.
For more information or to read the full first-quarter financial report, click here.