Australia’s mail service has posted its first profit in three years as a record number of parcels delivered more revenue for the company, boosting its pre-tax return to $18.8 million.
But its letter business continued to drop during the past year, losing $230 million and was only saved from a greater fall by federal, state and local election material.
In its 2025 full year results on Friday, Australia Post said its letter business had fallen into “permanent decline” and postage prices would need to rise again.
The results also came just days after the government-owned network surprised customers by suspending parcel deliveries to the United States, following an expansion of US tariffs.
Australia Post’s pre-tax profit is its first since 2022 and a significant improvement from last year’s $88.5 million loss.
Record Christmas parcel deliveries of 102.8 million contributed to the result, with revenue from parcels and services rising by 2.9 per cent to $7.64 billion.
Domestically, parcel volumes grew by 2.6 per cent despite growing competition from global tech firms such as Amazon and small logistics start-ups.
Australians continued to send fewer letters during the year, with volumes down 5.4 per cent to 1.66 billion.
Despite a 30-cent increase to the basic postage rate in April 2024 and a move to deliver letters every second business day, Australia Post lost $230.4 million on the service.
Australia Post chief executive Paul Graham said letter volumes fell 11.7 per cent when state and federal election one-offs were excluded.
“Our letter service is in permanent decline and we don’t expect it will ever return to profit,” he said.
The company flagged further postage fee rises would be needed to address the growing cost of the service.
The company invested $371.9 million in fleet, technology and facilities during the year, including a parcel-processing facility at Melbourne Airport, delivery centre at Blacktown in NSW, and parcel and letters facility at Narrandera in regional NSW.
Australia Post could not afford to be complacent about its operation, Mr Graham said, amid growing competition for parcel deliveries.
“Competition in the parcels market remains fierce, with global online marketplace retailers ramping up their presence in Australia,” he said.
“We are facing sector-wide headwinds like many other global postal operators.”
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