Royal Mail has said full-year pre-tax profits slumped 33% to £267 million as it took a hit from transformation costs.
The postal delivery company said the fall reflects one-off items, such as pension charges, that distorted its balance sheet.
However, revenue rose 1% to £9.2 billion as chief executive Moya Greene hailed a “resilient performance”.
Parcel deliveries, where competition from the likes of FedEx and UPS have eaten into Royal Mail’s market share, rose 3%.
Under Ms Greene, the company has embarked on an ambitious cost-cutting drive and the company confirmed that it reduced its headcount by 3,500 over the year.
Ms Greene added: “We are introducing new and improved products and services and responding quickly to changing customer needs.
“These measures, alongside our emphasis on customer focus and delivering a value for money service, have helped us to maintain our pre-eminent position in UK letters and parcels and driven growth.”
In the UK, revenue fell 1% to £7.6bn as letter volumes fell by 3%.
Adjusted annual operating profits before transformation costs - Royal Mail’s preferred measure of performance - rose 5% to £742m.
The 500-year-old company was privatised in 2013 and listed on the London Stock Exchange. Shares were down over 3% at 491p in morning trading.
Dave Ward, Communication Workers Union general secretary, said: “Royal Mail Group’s strong financial performance, in the face of tough market and regulatory pressures, show the company is well placed to deliver future growth and innovation in the business, working closely with the CWU.”