Significant decline in core mail volumes reduces revenue from operations
OTTAWA, May 30, 2012 /CNW/ - The Canada Post Group of Companies1 today reported a loss before tax of $3 million in the first quarter ended March 31, 2012, a decrease of $25 million when compared with a $22-million profit before tax in the same period a year earlier.
The Canada Post segment consists of the Group of Companies' core mail, parcel and digital delivery business. The segment's revenue from operations was lower than expected, as Transaction Mail volume fell by 4.5% or 58 million pieces compared to the same period last year. Transaction Mail is the product that generates most of the segment's revenue. Its continuing erosion is rooted in a profound shift to digital technology and creates an urgent need for Canada Post to transform its business. Direct Marketing mail volumes and revenues also declined as corporate customers reduced their marketing spend and shifted to electronic media.
Canada Post has begun to redefine its relevance in the digital economy by, among other things, investing to grow in home delivery of packages generated by e-commerce. In the first quarter, Canada Post's Parcel volume grew modestly.
The Corporation continues to face a sizable and volatile solvency deficit of approximately $4.7 billion in its pension plan. As the plan sponsor, Canada Post is responsible for funding shortfalls in the plan and despite its significant challenges, the Corporation must remain viable and profitable in order to meet this obligation while continuing to offer Canadian businesses and consumers affordable services.
The Group of Companies finalized the purchase from CGI of all remaining voting shares in Innovapost in the first quarter. Innovapost is now focusing on obtaining synergies and providing systems and information technology services to the Group of Companies.
The Canada Post segment has made significant improvements in on-time service performance in the first quarter in the midst of an unprecedented degree of modernization of plants, equipment and processes.
Background
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/About Us 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 subsidiaries Purolator Inc., SCI Group Inc. and Innovapost Inc.
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