Packages and services revenue hit a record $8.01 billion in the year to June 30, while losses from sending letters fell to $63.2 million from a $230 million hit the year before.
Cutting letter deliveries to every second day, a nearly 15 per cent fall in letter volumes to 1.42 billion and a stamp price increase to $1.70 helped soften the blow.
The new delivery model alone saved the company $188.3 million over the 12 months.
While AusPost was targeting even fewer mail shipments, there were no immediate plans to follow Denmark in ending letter sending altogether, chief executive Paul Graham said.
"We'll continue to deliver letters until the last letter needs to be delivered," Mr Graham told AAP.
"What we want to continue to do is to reflect a delivery frequency that reflects the decline in mail."
Mail would eventually be delivered once every three days and ultimately once per week, but it was unclear when.
The postage carrier handed down a pre-tax profit of $31.8 million, up from $18.8 million the year before.
The figure would have been a $107.6 million loss without $140 million in property divestment returns.
Despite booming parcel revenues, margins were tight and integrated ecommerce platforms like Amazon continued to grow their local presence.
"We are seeing margins squeezed by global competitors ... and the entrance of new competitors who are targeting our metropolitan volume and doing so at very low costs," Mr Graham said.
"We're investing in our network heavily to ensure we can provide Australian retailers with the best chance to compete against global platform players."
Australia Post built 14 new parcel facilities over the course of the year, including 10 outlets in regional and remote locations.
The carrier has 4118 retail outlets throughout Australia.
It remains committed to maintaining 4000 outlets with 2500 of those in regional or remote locations.
There would be more property sales ahead, however.
"We have got further plans to execute that strategic property plan, which will see us divesting of non-core properties," Mr Graham said.
"Every dollar we get for those properties will be ploughed back into our strategy and investing in the business."
Part of that strategy was future-proofing the business, including $40.5 million announced to speed up the company's fleet electrification following months of elevated fuel prices.
"The fuel situation has been very volatile for us," Mr Graham said.
"It's a pass through cost, so we look to just recover that fuel increase over the cycle."
Operating costs increased by almost four per cent over the year, driven by wages growth, licensee commissions and contractor rates, and higher parcel volume-related costs.Â
"We've got a clear plan to ensure that we remain sustainable, and you know we're continuing to execute that plan," Mr Graham said.
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