Australia Post reported a modest pre-tax profit for the 2026 financial year, supported largely by nearly $140 million in property sales, despite facing its third-largest underlying loss. The national mail carrier posted an underlying loss of $107.6 million, excluding gains from property divestments, signaling ongoing challenges in its traditional letter delivery service.
Revenue for the group rose 4 percent to $9.83 billion, with profit before tax increasing to $31.8 million from $18.8 million in the previous year. The parcels and services segment remained a bright spot, generating $8.08 billion in revenue—a 4.8 percent increase—while letter volumes fell sharply by 14.7 percent. The decline in letter volumes and rising delivery costs continued to weigh heavily on Australia Post’s overall performance.
Over the past four years, the carrier raised postage prices from $1.10 to $1.70, which helped reduce losses by approximately $500 million. Nonetheless, these increases were insufficient to halt the deterioration in the letters business, which recorded losses of $63.2 million in the past year despite a recent 20-cent stamp price hike. The ongoing decline in traditional mail has raised concerns about the long-term sustainability of this arm of the business.
Australia Post Chief Executive Paul Graham pointed to the growing pressure on the letters division and the mounting competition faced by its parcels service, particularly from new international entrants. He highlighted the struggle to maintain margins amid intense price competition from last-mile delivery providers, including international operators and platform giants like Amazon and Temu, many of which are linked to Chinese markets.
“We think that given the decline in mail, our actual trading losses in our mail business will be significantly greater,” Graham said. He noted that while property sales have thus far contributed positively to earnings and further divestments are planned for 2027, this revenue stream is nearing exhaustion.
Despite these headwinds, Australia Post has been actively investing in infrastructure, opening 14 new facilities in the last financial year, including 10 in regional areas. Graham emphasized the need for continued adaptation to protect the carrier’s future sustainability, acknowledging that “further work is needed to protect the long-term sustainability of the business.”
The parcels business remains a key growth driver but continues to face margin pressure amid fierce competition. As the traditional letter service declines and property sales wind down, Australia Post faces significant challenges in balancing service obligations with financial viability in a rapidly evolving logistics market.