Canada Post reports $254 million loss in second quarter

Canada Post recorded a loss before tax of $254 million in the second quarter of 2023 as revenue fell across all lines of business.

The Canada Post segment’s revenue in the second quarter declined by $78 million, or 6.0 percent, compared to the same period in 2022. The segment’s loss before tax in the second quarter widened by $94 million, from a loss before tax of $160 million in the second quarter of 2022.

For the first half of 2023, Canada Post’s revenue fell by $110 million, or 3.3 percent, compared to the same period of the prior year. The segment’s loss before tax was $361 million compared to a loss before tax of $289 million in the first half of 2022.

An increasingly competitive parcel delivery market continued to impact parcels revenue in both the first and second quarter of 2023. Transaction mail volume continued to erode, while direct marketing revenue declined as businesses’ marketing budgets remained under pressure.

For the first half of the year, total operating costs were relatively flat, decreasing by 0.1 percent, or $3 million, compared to the first half of 2022. In the second quarter, the cost of operations rose by 1.7 percent, or $31 million, compared to the same period a year earlier. These changes in costs were mainly due to lower total labour and employee benefit costs, partly offset by higher non-capital investments in technology and operations.

Parcels

In the second quarter of 2023, parcels revenue fell by 7.0 percent, or $46 million, as volumes rose by 2.6 percent, or two million pieces, compared to the same period of 2022. Revenues were impacted by the growing use of rate shopping platforms by customers, increased competition and a drop in fuel surcharges tied to market rates.

At the same time, domestic parcel volumes increased due to ongoing strategic efforts to secure new accounts and additional volumes. For the first six months of the year, Parcels revenue declined by 3.4 percent, or $45 million, and volumes fell by 2.7 percent, or three million pieces, compared to the same period of the prior year.

Group of companies

For the second quarter, the Canada Post Group of Companies recorded a loss before tax of $167 million, compared to a loss before tax of $64 million in the same period a year earlier. Purolator recorded a profit before tax of $87 million compared to $91 million in the second quarter of 2022, while SCI’s profit before tax was nil compared to $4 million in the same period of the prior year.

For the first six months of the year, the Group of Companies recorded a loss before tax of $225 million compared to a loss before tax of $164 million in the same period of 2022. Purolator recorded a profit before tax of $133 million, compared to $119 million in the prior year period, while SCI recorded a profit before tax of $3 million, compared to $6 million in the same period of 2022.