Canada Post reports $50M quarterly loss
Mail volumes fall 9% in the third quarter
The Canada Post Group of Companies reported Monday its sixth consecutive quarter of losses as mail volumes continue to decline amid a consumer shift away from paper-based communication.
The Crown corporation reported Monday a third-quarter loss of $50 million, an improvement from a loss of $113 million during the quarter last year.
However, it warned its mail volumes are "likely to decline further and rapidly." For the first three quarters of the year, it lost $61 million overall, narrowing a loss of $110 million for the first nine months of 2011.
Revenues fell 1.9 per cent to $1.7 billion from $1.8 billion in the 2011 period.
The company is struggling with an influx of consumers turning to online billing as well as using email for many correspondences.
"The corporation is accelerating the transformation of its business in order to meet the evolving needs of Canadians and avoid becoming a burden on taxpayers," it said in a release.
The Canada Post segment made up of the core mail, parcel and digital delivery business, had a loss before tax of $91 million in the third quarter and a loss of $114 million in the first three quarters of 2012.
Mail volumes fell by nine per cent, or 119 million pieces of mail, in the third quarter and by 5.9 per cent, or 207 million pieces, in the first three quarters, compared with similar periods in 2011. Domestic mail volumes were down 9.5 per cent during the most recent quarter, while direct marketing mail volumes fell 7.3 per cent.
Parcel revenues grow
However, its parcel delivery service helped to stem some of the declines, thanks to growth in e-commerce orders. Parcel revenues were up by seven per cent, as were volumes compared to the same period of 2011. But the company said growth in the segment is not enough to offset losses from declines in other segments.
Canada Post said it must also secure new collective agreements that will help it to compete. It reached tentative agreements with the Canadian Union of Postal Workers' bargaining units for urban employees and for rural and suburban mail carriers in October.
Ratification voting will take place until Dec. 19.
"Successful ratification would allow Canada Post and the 53,000 employees in these bargaining units to focus on transforming the business to face the digital economy. A failure to ratify could worsen Canada Post's significant challenges and make aspects of the tentative agreements unaffordable," it said.
Canada Post also has a roughly $4.7-billion solvency deficit in its pension plan.
The company has noted that 71 per cent of its overall costs are tied to labour, which is why it believes it's important to reach a collective agreement with the union representing its employees.
Canada Post locked out some 50,000 of its employees last summer after a series of rotating strikes.
The dispute ended with federal back-to-work legislation that forced workers to accept wages that amounted to less than Canada Post's last offer.
The Canada Post Group of Companies is made up of Canada Post, Purolator, SCI Group and Innovapost.