Parcels income swelled to a record $8.01 billion in 2025/26, up almost five per cent from the previous financial year.
The postage carrier handed down a pre-tax profit of $31.8 million, up from $18.8 million the year before, although this year's figure would have been a 107.6 million loss without $140 million in property divestment returns.
The Commonwealth-owned company was delivering on its strategy, but more work was needed to protect its sustainability, chief executive and managing director Paul Graham said.
"Australia Post is taking a different path," he said in statement on Friday.
"We want to keep building a modern Australia Post for a modern Australia, one that provides even faster delivery, more convenient parcel collection and continued access to essential services for all Australians."
Losses from letter sending fell to $63.2 million, down from more than $230 million a year earlier, as letter volumes dropped 14.7 per cent to 1.42 billion.
The impact was partially offset a 20 cent increase to the basic postage rate to $1.70 in mid-2025, with that figure to rise to $1.85 on September 1.
The organisation's new delivery model, which includes reducing non-urgent letter delivery frequency and strategically alternating dispatches by parcel type, saved the company $188.3 million over the 12 months.
"We are upgrading what we do and how we do it because the way Australians work, shop and connect has changed," Mr Graham said.
"Australians are sending fewer letters than ever before, while buying, selling and transacting online at record levels."
The company would continue to look ways to streamline the letters service, but said more price hikes and efficiencies would be required to ensure the sustainability of essential services delivery, especially in regional, remote and vulnerable communities.
Operating costs increased by almost four per cent, driven by wages growth, licensee commissions and contractor rates, and higher parcel volume-related costs.Â
The carrier remained committed to maintaining 4000 retail outlets throughout Australia (there are currently 4118), with 2500 of those in regional or remote locations, the statement said.
"As Australia changes, Australia Post is evolving, but what will not change is our commitment to connecting Australians, supporting communities and helping businesses grow," Mr Graham said.
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