The group lost $384 million delivering letters in the 12 months to June 30, up 50 per cent from the previous year, an amount only partially offset by its profitable parcel delivery business.

Revenue was steady at $8.97 billion and largely flat from the previous year, Australia Post announced on Thursday.

“These results should not come as a surprise,” chief executive and managing director Paul Graham said.

“We’ve been flagging the challenges of Australia Post for well over a decade, and particularly in recent years, we’ve continued to see a significant decline in our mail business.

“We’ve got a two-speed business. We’ve got a growing and profitable mail business and financial services business and we’ve got a rapidly declining mail business.”

Letter volumes fell 7.8 per cent to two billion in 2022/23, despite an increase in business-related letters involving interest rate changes and data breaches.

The average Australian household receives only 2.2 addressed letters each week – down from 8.5 a week in 2008 – and Australia Post said its mandate to deliver letters five days a week remains one of its most significant costs.

Overall its community service obligations cost the group $442 million, up 27 per cent from 2021/22.

Graham said modernising Australia Post required the government changing the 1989 Postal Act, “which I think everybody would agree is not really relevant to a 21st century, e-commerce, digital mail business”.

In March, the Albanese government launched a discussion paper on potential changes to Australia Post, including postage rate hikes and relaxing the requirement to deliver letters five days a week. But the government is yet to outline any plan for reform.

Graham said the government’s request for consultation received more than 1000 responses, of which 140 have been publicly released.

“I think the encouraging thing is those responses generally align with our research, that shows the average consumer doesn’t really care that much about the price of a stamp, because they’re not really mailing anything,” he said.

“They don’t need mail (delivery) five days a week, because they don’t get mail five days a week, but that’s what we’re regulatory required to do.”

Graham said Australia Post has provided significant modelling on different scenarios for government departments to analyse as they work towards a response to the discussion paper.

“But obviously, with the losses that we’ve announced today, every day that goes by that we don’t have reform makes it that much difficult for us to get back on the path to profitability,” he said.

“So we’d be encouraging the government to act sooner rather than later.”

-with AAP