Canada Post profits drop

Canada Post has reported a profit before tax of $55 million before tax in 2016. This was bolstered by its parcels division.

Profits are down by $8 million on last year, but Canada Post have released a statement saying that the results were still “a positive sign considering the significant challenges facing the company”.

Canada Post explained: “With declining mail volumes, less than half of the segment’s revenue in 2016 was generated by Transaction Mail, or letters, bills and statements. In addition to that issue, the Corporation is faced with the challenges of significant pension obligations, labour costs and the need to invest in network capacity to keep up with growing parcel volumes.”

The postal operator’s parcels business saw revenue growth of $521 million since 2011 due to e-commerce growth.

Canada Post commented: “In 2016, Parcels revenue from the Canada Post segment increased by $92m or 5.6% compared to 2015. At 195m, volumes increased by 14m pieces or 7.7% compared to 2015. Domestic Parcels volumes grew by 11m pieces or 9.0% compared to 2015. Inbound Parcels volumes – from the U.S. and the rest of the world – increased by 8.4% compared to 2015, driven particularly by strong growth from Asia Pacific countries.

“Parcels continue to generate an increasing proportion of Canada Post’s revenue. Parcels generated 28% of the segment’s revenue in 2016; by comparison, Parcels generated 26% of revenue in 2015 and only 21% in 2011.

On a less positive note, volumes in Transaction Mail, the Canada Post segment’s largest line of business, continued their decade-long decline in 2016.

“Volumes fell by 286m pieces or 7.8% compared to 2015,” said Canada Post. “Revenue fell by $153m or 4.8% compared to 2015. At $3.0bn in 2016, Transaction Mail generated 49% of the Canada Post segment’s operating revenue of $6.2bn. In 2011, Transaction Mail had generated 53% of the segment’s revenue.

Union boss CUPW National President Mike Palecek said: “We want to see a plan that ensures the future viability of the postal service.

“Around the world, post offices are expanding services to bring in new revenue. This country urgently needs services such as broadband, postal banking, services at the door for seniors and electric charging stations. Canada Post could offer solutions. Instead, they offered a raft of service cuts that wasted hundreds of millions of dollars.”  
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