Canada Post Reports First Quarter Losses of $66 Million
Despite the significant increase in online shopping during the coronavirus pandemic, the revenue generated from parcel delivery was not enough to cover Canada Post’s costs, and as a result, the crown corporation reported a before tax loss of $66 million for the first quarter of 2020.
Although the demand for mail services has increased, especially during the pandemic, that increase is predominantly attributed to parcel delivery, rather than traditional transactional mail such as bills, statements, and letters. Canada Post stated that due to increasing costs stemming from labour, employee benefits, and technology needed to process parcels, the crown corporation’s financial performance began to deteriorate.
In the first quarter, parcel volumes increased by 6.1%, while revenue increased by 10.4%, compared to the year prior. Domestic parcel volumes rose by 6.3%, and the corresponding revenue increased increased by 10% in the first quarter of 2020, when compared to the same time of the previous year. Also in the first quarter of 2020 however, the volume of transaction mail dropped by 2.2%, and revenues fell by 0.6%, compared to the same time a year prior.
Information for this briefing was found via iPolitics and CBC News. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
