Canada Post Group of Companies lifted from $58-million loss by $109-million gain from sale of downtown Vancouver plant
Expects substantial financial loss for the year
OTTAWA, May 29, 2013 /CNW/ - The sale of a mail processing plant in downtown Vancouver lifted the Canada Post Group of Companies1 to a profit before tax of $51 million for the first quarter ended March 30, 2013. If not for the $109-million gain from the sale, the Group of Companies would have had a loss before tax of $58 million for the first quarter. The Group of Companies reported a loss before tax of $73 million for the first quarter of 2012.
The core Canada Post segment would have reported a loss before tax of $41 million for the first quarter if not for the sale of the Vancouver plant. Instead, the segment is reporting a profit before tax of $68 million for the first quarter, compared to a loss before tax of $59 million for the same period last year. The plant was one of Canada Post's most significant properties and was disposed of in January 2013, as a new multi-purpose facility is being built at the Vancouver International Airport.
Declining volumes continued to underscore the changing needs of Canadians for postal services and the need for Canada Post to transform the business. The segment's total volumes declined by more than 136 million pieces in the first quarter compared to the same period a year earlier and revenue from operations was essentially flat despite price increases. With continued volume declines, eroding revenue and limited flexibility to make rapid adjustments given its infrastructure and high fixed costs, Canada Post expects a substantial financial loss in 2013.
Transaction Mail is primarily the letters, bills and statements that generate most of the Canada Post segment's revenue. In the first quarter, Transaction Mail volumes declined by 60 million pieces or 1.9 per cent compared to the same period in 2012. This is due to the impact of digital alternatives, the implementation of pay-for-paper initiatives by some of Canada Post's largest customers, particularly in the banking and telecommunications sectors, and the highly competitive environment.
Direct Marketing volumes declined by 76 million pieces or 2.9 per cent compared to the same period in 2012. In Publications Mail, publishers and consumers are shifting to digital alternatives, while Unaddressed Admail customers are reducing their spending or redirecting portions of it to other channels.
Canada Post's strong position in the competitive business-to-consumer delivery market was reflected in the growth of parcels volumes, which were up by about 300,000 items or 4.0 per cent in the first quarter compared to the same period in 2012.
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. Canada Post has a mandate from the Government of Canada to remain financially self-sufficient and to provide a standard of postal service that is affordable and meets the needs of the people of Canada.
To access the full report in PDF, visit canadapost.ca/aboutus and select "Quarterly Financial Reports" from the Corporate menu.
1 The Canada Post Group of Companies, or the Group of Companies, refers to the Canada Post Corporation and its principal subsidiaries Purolator Inc., SCI Group Inc. and Innovapost Inc.
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