Ottawa (ON) â€“ The Canada Post Group* today reported that it experienced a continued deterioration in its core Canada Post segment in 2010.
In the Canada Post annual report, which was tabled with the Clerk of the House of Commons today, the company disclosed that earnings before income taxes in the Canada Post segment in 2010 were $233 million, a 27% decrease from 2009. Volume in the companyâ€™s flagship domestic Lettermail business decreased by 4.5% from 2009. That marked the fourth consecutive year-over-year decrease in domestic Lettermail volumes and fifth consecutive year of decrease in volumes per address in Canada. Total volumes in the Canada Post segment (comprised of the Transaction Mail, Parcels and Direct Marketing lines of business) decreased by 1.8% from 2009. Revenue from Operations for The Canada Post Group totalled $7.5 billion.
The Canada Post pension plan continued to pose a significant financial burden on the Group in 2010. The plan had a liability of $16 billion and a pension solvency deficit of $3.2 billion at the end of 2010. Canada Post made $746 million in cash contributions to the pension plan in 2010, including $425 million in special payments relating to the solvency deficit. As a result, Canada Post generated negative cash from operating activities in 2010.
Driven by a non-cash income tax entry of $192 million, The Canada Post Group* recorded consolidated net income of $439 million in 2010.
* The Canada Post Group is comprised of the core Canada Post segment, subsidiaries Purolator and SCI Group and Innovapost, a joint venture with CGI Group. The Canada Post segment accounted for almost 80% of the Groupâ€™s revenues in 2010.