Australia Post boss Ahmed Fahour is confident a new two-tier mail system and higher stamp prices will get the organisation back on its feet despite falling letter volumes.
The national postal service made a profit of $16 million in the six months to December, after posting a $222 million loss in the 2014/15 financial year, its first loss in more than 30 years.
The half year profit was down 84 per cent on the same period a year earlier, as letter volumes fell a further 9.5 per cent, but there was growth in Australia Post's parcel business.
Tumbling demand for addressed mail prompted Australia Post to hike standard stamp prices from 70 cents to $1 in January.
A new two speed letter service also means regular post will be two days slower than a more costly one-to-four business day priority service.
Mr Fahour said these changes are expected to reduce the growing losses in the mail business, and help deliver an annual profit.
"The half year result highlighted why reform to the letters service was absolutely necessary to ensure future sustainability of the business," he said.
Five day mail delivery will continue, and Australia Post's network of more than 4,000 stores maintained, Mr Fahour said.
But more needs to be done to generate new revenue streams, and Australia Post is working with corporate and government customers to build on capabilities such as passport registrations, identity checks, banking and payment services, he said.
"We will also look to further build on eCommerce partnerships to help our customers buy and sell online, both here in Australia and also internationally," Mr Fahour said.
That includes joining Asian eCommerce giants JD.com and Alibaba on some of their most popular online shopping platforms.
MAIL DECLINE STILL A CHALLENGE FOR AUSTRALIA POST
* Half year profit down 84pc to $16m
* Letter volumes down 9.5pc
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