An Post more than doubled its profits in the last year despite falling mail volumes, its annual report shows.

It recorded profits of €8.6 million in 2015 compared with €3.3 million in 2014. Revenue rose by over €10 million to just over €826.1 million from €815.4 million in 2014.

The report describes losses of €32.3 million in delivering Universal Service Obligation (€38.2 million in 2014) as “an ongoing matter of concern” despite having been reduced from a €67.3 million loss in 2012.

The company recorded inflows of €400 million to the State’s savings fund “despite the low interest rate environment”. The State savings fund is now worth €19.5 billion.

An Post also reports that €100 million in annualised cost savings has been achieved.

Mail volumes are down 35 per cent from peak in 2007, but the report said revenue loss since the peak is “compensated by cost reductions, modest price adjustment, new product revenue and strong performance in subsidiaries”.

Revenue from mail totalled €526.2 million, up €4.9 million (1 per cent) on the previous year. Retail revenue totalled €164.3 million, marginally down from €166.1 million in 2014.

The report also shows 43 post offices were “completely refurbished” – 23 of which were in new locations with “improved customer facilities”, while 14 vacant post office contracts were advertised in various parts of the country.

In all, six post offices were closed. In 17 areas, local mail delivery services were relocated to a purpose-built “delivery service unit”.

Subsidiary companies “continued to produce strong results” in their respective business lines with revenue reaching €122.9 million. In all, the contribution of subsidiary companies increased by 23 per cent from €13m in 2014 to €16m.

An Post chief executive Donal Connell said it had been a year of “significant challenge and progress” as the company continues to focus on the changing needs of its customers and markets.

“Profit of €8.6 million, compared to €3.3m in 2014, is significant in that we maintained our profitability in the face of a mails volume decline of 2.9 per cent,” he said.

“Group revenue continues to be very satisfactory at €826.1 million. Our strategy of implementing appropriate pricing and cost efficiency measures in the core business while maintaining high standards of service quality, product innovation and diversification has to-date enabled the company to adequately cope with unprecedented threats and challenges.”

He added however that the medium and longer term issues of safeguarding the Universal Service Obligation and sustaining a high quality service requires “urgent discussion” with all stakeholders so the company can achieve “the necessary level of profitability to ensure its fiscal stability”.

Mr Connell, who joined An Post as chief executive in 2006, announced that he plans to leave the company in the second half of this year when his contract expires.

An Post chairman Dermot Divilly said that while the mail business remains the largest revenue segment for the company, it now represents 64 per cent of total revenue, down from 74 per cent in 2008.

“In response to the new normal of declining mail volumes, An Post, like so many other postal companies has strengthened its position in other businesses in Ireland and the UK,” he said.

“While the company continues to develop opportunities presented by emerging trends in e-commerce, it will have to respond quickly to convert these into new business revenue streams. To date, An Post has been successful in doing so.

“While the An Post Group is profitable, the current model whereby the profitable elements (retail and subsidiaries) subsidise the loss-making mails business is, in my view, becoming increasingly unsustainable.”