The Canada Post segment reported a profit before tax of $24 million for the first quarter ended April 4, 2015, compared to a loss before tax of $27 million for the first quarter of 2014. The results were mainly due to continued growth in the Parcels business and tiered pricing for Transaction Mail.
In the first quarter, volumes of Domestic Lettermail – the letters, bills and statements that are Canada Post’s core business – fell by 8.4 per cent1 or 41 million pieces compared to the same period a year ago. This trend further reinforces that Canadians are accelerating their adoption of digital means to receive important mail. Since their peak, Domestic Lettermail volumes have fallen every year and in 2014, Canadians sent 1.4 billion fewer pieces of mail than in 2006.
Significant volatility in employee benefit expenses continues to present a sizeable financial risk to the Corporation. Employee benefit expenses for the Canada Post segment rose by 18.1 per cent, or $70 million in the first quarter compared to the same period a year ago. This was due to a decrease in the discount rates used to calculate the benefit plan.
The decline in Lettermail volumes was offset by higher revenue from the tiered pricing structure that took effect at the start of the second quarter of 2014. Transaction Mail revenue grew by $112 million or 9.1 per cent, to $889 million in the first quarter while volumes fell 8 per cent from the same period a year ago. The pricing structure has helped to offset declining Transaction Mail revenues, contributing to the Corporation’s financial self-sustainability so it does not become a burden on taxpayers.
Canada Post’s focus on delivering innovative solutions for e-tailers, as well as for consumers who are looking for more flexibility in how they receive their online purchases, is continuing to yield strong results. First-quarter Parcels revenue for the Canada Post segment rose to $380 million, up $39 million or 6.2 per cent1 compared to the same period a year ago, while volumes increased by more than 4 million pieces or 6.5 per cent.
Revenue from Direct Marketing rose by $11 million to $298 million in the first quarter of 2015 compared to the same period in 2014, while volumes grew by 47 million pieces. Both revenue and volumes declined by less than 1 per cent in the first quarter of 2015 compared to the same period in 2014.
The Canada Post Group of Companies reported a profit before tax of $22 million in the first quarter of 2015 compared to a loss before tax of $37 million for the same period of 2014.