Canada Post set to turn profit amid dramatic cuts | Toronto Star

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Canada Post set to turn profit amid dramatic

cuts
Crown corporation expects to turn profit in 2014, thanks to hike in stamp prices and
growing demand for parcel deliveries.

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The third quarter, which includes the summer months, is typically the slowest one for Canada Post.

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By: Vanessa Lu Business reporter, Business Reporter, Published on Wed Nov 26 2014

After making dramatic changes that include starting a phase-out of door-to-door home
delivery and hiking the price of stamps, Canada Post says it expects to end the year in
the black.
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Kitchener show

The crown corporation reported third-quarter earnings on Wednesday that showed the
post office segment recorded a before-tax profit of $13 million, compared to a $129
million loss in the same period a year earlier.
For the first three quarters of 2014, profit before tax totalled $39 million, compared
with a loss of $165 million over the same period in 2013.

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With the busy holiday season rounding out the year, we are expecting to finish 2014
with a profit, said spokesman Jon Hamilton, noting there was a loss in the first
quarter, but it has been profitable since then.
Canada Post credits the turnaround to higher revenues from its parcel and mail
business as well as lower employee benefits costs, which dropped $48 million in the
third quarter.
Mail volumes continued to slide, falling 6.1 per cent, or 58 million fewer pieces, in the
quarter. But revenues actually increased by $90 million, or 13.7 per cent, thanks to a 35
per cent jump in postage rates.

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In late March, the price of domestic stamps rose to 85 cents from 63 cents if they were

http://www.thestar.com/business/2014/11/26/canada_post_set_to_turn_profit_amid_dramatic_cuts.html

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Canada Post set to turn profit amid dramatic cuts | Toronto Star

2015-01-08, 1:47 PM

bought in a packet or bulk. A stamp purchased individually costs $1.

The third quarter, which ended Sept. 27, is traditionally a slower period because it
covers the summer. The fourth quarter is always the busiest, with increased holiday
business, especially thanks to the growth of online shopping.
We are anticipating a 20 per cent increase in parcel volumes this season, Hamilton
said. Canadian retailers have really caught on to the Black Fridays and Cyber
Mondays.

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During peak periods, Canada Post anticipates delivering 800,000 parcels a day, which
translates into processing about 1,200 parcels a minute in plants, said Hamilton.

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Parcel volumes increased by almost 3 million pieces in the third quarter, with revenues
up $25 million, or more than 8 per cent, compared to the same period a year earlier.

Careers

When asked whether the post office expected to see a drop in the number of Christmas
cards sent this season due to the jump in stamp prices, Hamilton said it is too soon to
say.

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While Christmas card volumes have been falling over the years, sales of Christmas
stamps have been strong, he said. But you still see a lot of red and green envelopes in
the mail stream.
When Canada Posts earnings are added to its affiliated companies that include
Purolator, its profits before taxes in the first three quarters of the year totalled $84
million. Thats a far cry from the 2014 forecast, approved by the federal government, of
a $274 million loss for the year before taxes.
In February, the federal government granted Canada Post a delay in making special
payments owed on its pension plan until 2017. Without the relief, Canada Post would
have been required to pay about $1.3 billion this year.
Denis Lemelin, national president of the Canadian Union of Postal Workers, says the
profits indicate Canada Post didnt need to implement its dramatic action plan.
It shows the post office is still relevant, and people use it, he said. It shows that
Canada Post did not have to be so drastic about cutting and cutting and cutting, he
said.
Lemelin said he still expects Canada Post to continue with its five-point action plan that
calls for eliminating up to 8,000 jobs over five years. But we are fighting to stop them,
he said, referring to a charter challenge the union has launched to block the plan to cut
door-to-door mail delivery.
The post office has already switched about 100,000 addresses to community mailboxes,
mostly in suburban communities, including Oakville, last month.
More conversions are anticipated in 2015, affecting residents of Milton, Thornhill,
Unionville and Whitby.
By the end of next year, Canada Post expects 1 million customers will have been
switched out of 5 million who receive door-to-door home delivery.

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Canada Post set to turn profit amid dramatic cuts | Toronto Star

2015-01-08, 1:47 PM

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