Canada Post reports $53M profit in second quarter
Canada Post mailbox (Postmedia Network files)
Canada Post reported a $53-million profit for the second quarter of 2014, crediting stamp price increases, growth in its parcels business and recent changes to the postal workers' benefits program.
The gain compares to a $104-million loss during the same time last year.
The good news is somewhat offset, however, with a continuing drop in mail volumes, which slid another 4.7% in the first two quarters of 2014.
The dip in mail volume was stymied in the second quarter by provincial elections in Quebec and Ontario, which saw candidates mail out flyers and information to potential voters.
Despite the drop, revenue for mail rose by 2.5% to $1.6 billion in the first half of the year compared to the same time last year.
Canada Post's parcels business growth is mainly due to an increase in online shopping, the agency indicated, boasting it "delivers more parcels from businesses to consumers than any other company in Canada."
The volume of domestic parcels, which make up the largest portion of those delivered, increased by 10.9% in the second quarter year-over-year.
In the first two quarters of the year, revenue from all parcel deliveries grew 9.2% to $694 million.
Last year, the company began a five-point action plan to get its financials back on track, which included eliminating door-to-door delivery with the installation of community mailboxes, increasing the price of stamps, opening more postal franchise — 31 new outlets this year — streamlining operations and addressing the cost of labour.
To keep the cost of labour down, new hires are offered a lower starting wage and they are eligible for a defined contribution pension plan, where both the employee and Canada Post pay into a retirement plan, instead of a defined benefit pension plan, which gives employees benefits even after they retire.