Cargojet suffers loss despite postal contract

Although Canada-based Cargojet took over the lucrative contract to deliver mail for Canada Post this past April, the carrier reported a loss for the third quarter this year, which ended Sept. 30. This is the third consecutive quarter that Cargojet has reported a year-over-year quarterly loss.

Total revenue was up 59.5 percent over third quarter of 2014, rising from US$35.6 million reaching to $56.8 million this year. However, Q3 ended up with losses of $1.66 million, y-o-y, which was a slight improvement over the $1.73 million Q3 loss recorded in 2014.

The carrier said that rising volumes from the Canada Post contract, coupled with lower-than-expected costs in preparation for the contract, gave the carrier a shot in the arm during Q3. But currency effects and higher operating costs incurred during an increase in block hours, plus the significant increase in fleet size to accommodate Canada Post volumes, partially offset any gains during the quarter.

Ajay Virmani, president and CEO of Cargojet, said customer volumes, particularly those related to e-commerce shipping, continued to grow in the third quarter in advance of the upcoming peak shipping season. The carrier also saw an increase in ACMI leases and benefitted from higher fuel surcharges.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), and before one-time costs, was $10.4 million, an increase of 133.9 percent over the previous year. Adjusted EBITDA, net of one-time costs, was $8.6 million.