“We have a regulatory requirement to have a minimum of two and a half thousand [post offices] in regional and rural Australia. So, we’re very committed to that footprint of regional and rural. But we do have significant overlap in metropolitan areas.”

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Revenues remained largely flat at just under $9 billion for the year, and it was ballooning losses in the group’s paper letters business, which caused most of the pain.

Letter volumes dropped by 7.8 per cent compared with last year, and losses in the group’s letters business were up by 50.2 per cent to $384.1 million. Parcels and services revenue was up by 0.9 per cent to $7.3 billion.

“In [financial year 2023], over-the-counter transactions continued the downward trend and have declined 20.9 per cent” since 2019, the group said.

The losses declared on Thursday represent just the second loss Australia Post has recorded since becoming a government business enterprise in 1989 and set the scene for a possible major overhaul to Australia Post’s footprint and services to keep it sustainable.

Graham was clear on Thursday that the group needed the support of government to ensure it was sustainable for the long term.

“If we do everything in our power to run this business well, and we get a favourable regulatory response towards modernisation, I’m confident that Australia Post will return to profit. Without this support, the [financial year 2023] loss will be followed by many more. Inaction could result in a greatly devalued Australian asset,” he said.

The review has placed a number of reforms on the table, including changing regulations around how the group sets letter pricing and reviewing the frequency of letters delivery.

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In its own submission to the review, Australia Post highlighted that its letters business was no longer sustainable and pointed to three key areas for modernising the service. It suggested a simplified regulatory approach to letter pricing, considering changes to letter delivery and making sure its retail network is fit for purpose.

“Running our retail network cost more than $1.3 billion in [financial year 2022]. Yet retail transactions (or purchasing goods and services) in Post Offices continues to decline, a trend also observed overseas,” the postal carrier said.

The group has been investing in measures to amp up its e-commerce offer, including a launch of next-day delivery offer for metro businesses.

Hundreds of jobs have also been axed at the group’s head office this year as it looks to simplify its corporate structure.