Canada Post Strike Leads To $35 million Loss in Second Quarter
Canada Post Corporation today reported that its core Canada Post business ("Canada Post segment") lost $35 million in the second quarter ended July 2, 2011. That represents a $70-million decline from the $35-million profit recorded by the Canada Post segment in the same period a year earlier. During the quarter, the Canada Post segment lost an estimated $167 million in revenues due to the impact of the labour disruption in June involving the Canadian Union of Postal Workers.
The Corporation, including the Canada Post segment and consolidated results of the Purolator, Logistics and other segments, reported a loss of $17 million in the second quarter, down from a net profit of $47 million during the same period a year earlier. Consolidated revenue from operations in the second quarter was $1.76 billion, down 2.4% from the same period a year earlier.
All three lines of business in the Canada Post segment (Transaction Mail, Parcels, Direct Marketing) sustained year-over-year declines in revenue and volumes in the second quarter mainly due to the effects of the labour disruption. Volumes in Transaction Mail declined by 6.0% in the second quarter compared to the same period in 2010, driven by a 5.8% volume decline in domestic Lettermail. Volumes in Parcels and Direct Marketing declined by 14.6% and 12.2%, respectively.
In the six-month period ended July 2, the Canada Post segment lost $13 million, representing a $70-million decline from the $57-million profit recorded in the same period a year earlier. The Corporation reported a profit of $3 million for the six-month period, down from a profit of $71 million in the same period in 2010.
The Canada Post Pension Plan ("the Plan") continued to pose financial challenges for the Corporation in the first six months of 2011. The Canada Post segment made $214 million in special payments to the Plan to address its solvency deficit, over and above regular contributions of $150 million, for a combined $364 million in regular and special contributions in the first six months of 2011.
Canada Post reported its quarterly financial results for the first time, in accordance with recent changes to the Financial Administration Act relating to Crown corporations. To access the full report in PDF, visit Canadapost.ca/AboutUs and select "Quarterly Financial Reports" from the Corporate menu.