NZ Post has delivered a net profit after tax of $102 million for the year ended June 30.

Net profit was $70m higher than the prior year.

Chief executive David Walsh said the profit was driven by an increase in earnings from NZ Post's share in Kiwi Group Holdings - the parent company of Kiwibank - and growth in its parcel segment.

However, Walsh warned of challenges ahead, including rising costs and a tight labour market.

Parcel revenue was up $137m on the previous year to $658m on the back of volume growth and pricing adjustments.

NZ Post delivered 93 million parcels, up 8 million on the previous year.

NZ Post also acquired logistics company Fliway Group Limited in FY2022, broadening its product and service offering, while extending into larger items and increasing its logistics and supply chain capability.

"Reflecting on the last year, given all the factors we had to navigate, our financial performance was pleasing, but we have much higher expectations on long-term performance" Walsh said.

"The next couple of years will be extra challenging as we face rising costs and a tight labour market. In the shorter term we've prioritised our people. We will also have costs impacting our earnings until both our network investments and a mail solution begin to deliver the expected benefits."

Walsh said revenue from its parcel segment continued to perform strongly and was in line with growth in online shopping seen during the 2021/2022 financial year.

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"This revenue growth was driven by volume increases, including lockdown-related volume surges and large peaks of online spending during holiday and event shopping days," he said.

Letter volumes continued to fall in FY2022, contributing to a $45m decline in revenue in the Mail segment. The NZ Post delivered 238 million letters, down 13 per cent (or 36 million letters) on the previous year.

"We are continuing to progress work on a sustainable long-term solution for mail services, which will include pricing, cost and operating model changes," Walsh said.

NZ Post has since agreed to sell its 53 per cent shareholding in Kiwi Group Holdings to the Government.

The Government announced on August 22 that it would buy Kiwibank for $2.1 billion from state-owned shareholders that want out - with the New Zealand Superannuation Fund and ACC among the other shareholders.

Walsh said investment into NZ Post's processing infrastructure continued at pace during the year.

This included the opening of its Christchurch Processing Centre last month and its Wellington Super Depot, to be formally opened in October 2022.

A new processing centre in Wiri, Auckland, is scheduled to commence operations in 2023.

"This investment will enhance customer experience through delivery efficiency and greater digital parcel transparency," he said.

Walsh said the company was working with unions to deliver a significant pay increase for frontline workers to address rising challenges including the increasing cost of living.

"Our people are integral to our success and this year has been particularly challenging for many, with the continuing social and economic impacts of Covid-19," he said.

"We are confident that this will make a difference to many of our people and will address the wider challenges around attraction and retention of talent into NZ Post.

"We continue to be conscious of the local and global economic uncertainties and how this might impact our customers and our business. We are proud to continue to rise to the challenge of being the best delivery business for New Zealand, and the critical role NZ Post has in the recovery and growth of the New Zealand economy," Walsh said.

NZ Post has also signed a financing agreement with New Zealand Green Investment Finance (NZGIF) to accelerate the transition of the NZ Post fleet and its delivery contractors' vehicles, to low emission vehicles.