An Post has reported group after tax profits of €347,000 for 2011.

This compares to a loss of €24.6m in 2010, which was due to an exceptional provision of €20m that year to cover the cost of redundancies.

Group operating profits fell to €2.2m from €5.8m, while turnover inched higher to €807m from €805m in 2012.

Mail volumes decreased by 7% last year, which An Post said was mainly due to the economic situation, an increase in the use of email and a reduction in the number of houses being built.

Mail volumes have now fallen by 23.5% since their peak in 2007 and An Post predicts another fall of 7% this year.

Overall mail revenue fell by €17m to €535m and An Post said this fall has resulted in a ''serious and unsustainable shortfall in Universal Service Obligation funding''. It warned that this jeopardises both the future of the service and the viability of its wider operation.

'Without necessary and overdue price adjustments, this situation will continue to deteriorate,'' it said. It has applied to the Commission for Communications Regulation for an increase in the price of a standard stamp, which currently costs 55 cent, later this year.

The company said that its total full time staff numbers have fallen by 1,100 since 2008 and it wants to cut another 1,500 by the end of 2016. An Post said that savings of €14.5m in pay costs were seen through more efficient working arrangements, increased use of automated mailing processing and headcount reductions.

Today's results show that the value of state savings reaching €14.1 billion in 2011, up €1.4 billion on 2010. An Post added that other new retail initiatives showed very encouraging growth, including its agency services for AIB and National Irish Bank.

''A strong and stable mails and retail infrastructure, trusted as it is by Irish and international customers, is an essential support to the process of economic recovery,' commented An Post's chairman John Fitzgerald.