Canada Post recorded a loss before tax of $290 million in the third quarter of 2023 as revenue fell for the Parcels and Transaction Mail lines of business.
The Canada Post segment’s revenue in the third quarter declined by $44 million, or 2.7 per cent,1 compared to the same period in 2022. The segment’s loss before tax widened by $63 million, from a loss before tax of $227 million in the third quarter of 2022.
For the first three quarters of 2023, Canada Post’s revenue fell by $154 million, or 3.5 per cent, compared to the same period of the prior year. The segment’s loss before tax in the period was $651 million compared to a loss before tax of $516 million in the first three quarters of 2022. While Parcels volumes increased, Parcels revenue continued to be impacted by an increasingly competitive parcel delivery market. Transaction Mail volumes and revenue continued to decline, while Direct Marketing volumes and revenue increased in the third quarter.
In the third quarter, the cost of operations rose by $26 million, or 1.4 per cent, compared to the third quarter a year earlier. For the first three quarters of the year, costs increased by $23 million, or 0.4 per cent, compared to the same period of 2022. Higher labour costs, non-capital investments in operations and technology, and depreciation expenses were partly offset by lower employee benefit costs.
With Parcels representing roughly half of Canada Post’s revenue, the Corporation is transforming to meet the evolving needs of customers in a competitive market, while strengthening the postal service’s position as a vital economic link for all Canadians.
Parcels
Parcels revenue remained relatively flat in the third quarter, falling by $3 million, or 0.3 per cent, as volumes rose by 7 million pieces, or 12.1 per cent, compared to the same period of 2022. Growth in the ecommerce market, along with improved service performance and competitive offerings like carbon-neutral shipping, contributed to the volume increase. Parcels revenue continued to be negatively impacted by rate-shopping platforms and a crowded and competitive market. In addition, fuel surcharges decreased significantly, tied to market rates. For the first three quarters of the year, Parcels revenue declined by $47 million, or 2.4 per cent, and volumes rose by 4 million pieces, or 1.8 per cent, compared to the same period of the prior year.
Transaction Mail
In the third quarter, Transaction Mail revenue fell by $43 million, or 7.7 per cent, as volumes declined by 40 million pieces, or 7.5 per cent, compared to the same period a year earlier. For the first three quarters of 2023, revenue declined by $83 million, or 5.0 per cent, while volumes also fell by 5.0 per cent, or 78 million pieces, compared to the same period of 2022. This was largely the result of a continued shift toward digital channels on the part of consumers and mailers. Regulated stamp prices remained at 2020 levels.
Direct Marketing
Direct Marketing revenue increased by $7 million, or 3.3 per cent, during the third quarter of 2023, as volumes increased by 43 million pieces, or 4.9 per cent, compared to the same period of the previous year. In the first three quarters of 2023, revenue declined by $10 million, or 1.8 per cent, as volumes fell by 63 million pieces, or 2.7 per cent, compared to the same period of 2022. New customer relationships and product development contributed to higher volumes and revenue in the third quarter. Overall, Direct Marketing volumes continue to be impacted by the shift toward digital marketing and an ongoing evolution in the advertising sector.
Group of Companies
For the third quarter, the Canada Post Group of Companies2 recorded a loss before tax of $217 million, compared to a loss before tax of $136 million in the same period a year earlier. Purolator recorded a profit before tax of $68 million compared to $84 million in the third quarter of 2022, while SCI’s profit before tax was $5 million compared to $6 million in the same period of the prior year.
For the first three quarters of the year, the Group of Companies recorded a loss before tax of $442 million compared to a loss before tax of $300 million in the same period of 2022. Purolator recorded a profit before tax of $201 million, compared to $203 million in the prior-year period, while SCI recorded a profit before tax of $8 million, compared to $12 million in the same period of 2022.