An Post lost almost €40m last year and wants to be able to increase prices to reflect the cost of delivering post across the country.

Its results for 2012 show it lost €39.4m after tax. The loss related to a charge for its pension deficit and an operating loss of €17.5m.

Sales were almost unchanged at €807m. The company reported growth in its subsidiary companies’ revenue to €111m, including One Direct and The Gift Voucher Shop.

An Post staff numbers fell by 349 last year and the company said its workforce has been reduced by 1,284 since the beginning of 2009. The organisation is due to cut its staff numbers by 2,600 by the end of 2016.

An Post chief executive Donal Connell said the cost of providing the Universal Service Obligation was over €60m last year.

"This is clearly unsustainable. Postal operators dealing with the particular challenges of the postal market must be able to price products and services according to market forces,'' he said.

Today's report shows that traditional mail volumes declined by another 5.2% due to economic circumstances and a structural decline in postal volumes in general, as a result of e-mails and new technology.

The annual report shows the total remuneration package for Mr Connell was €438,000 down from €495,000 a year earlier. Mr Connell's package for last year was made up of a €328,000 salary, benefits of €17,000, pension contributions of €77,000 and director fees of €16,000.