Royal Mail has revealed a £20m group operating loss in the first half of 2020, while insisting that a rise in parcel deliveries during the pandemic will improve its outlook.
The operating loss compares with earnings of £61m at the same point last year and follows an underlying operating loss of £129m at its core Royal Mail postal arm.
Group pre-tax profits fell by 90.2% to £17m during the same period.
But Royal Mail said it expected full-year revenues to be between £380m to £580m higher year-on-year, which could see a "better than break-even" result.
A bright spot in the results was the growth in parcel volumes, which the group said was due to more online shopping as many shops were forced to close their physical stores during the government's lockdown.
Domestic parcel volumes, excluding Amazon, were up 51% and Royal Mail Tracked varieties were up 72% year on year.
The group said it had processed 2.5 million tracked parcels on its busiest day.
International parcel volumes also grew over the first six months driven by imports, in particular as China emerged from COVID-19 restrictions and economic activity increased early in the period.
The international growth slowed later in the financial half-year, however, hit by reduced global air capacity and increased conveyance costs, with export volumes recording a small decline in the period.
Keith Williams, interim executive chair at Royal Mail, said: "For the first time, parcels revenue at Royal Mail is now larger than letters revenue, representing 60% of total revenue, compared with 47% in the prior period.
"As parcel volumes at both Royal Mail and GLS have continued to be robust year to date, revenue performance in the scenario has improved.
"It remains difficult to give precise guidance but parcel growth is expected to remain robust in the third quarter, with more uncertainty over trends in the fourth quarter due to the development of the COVID-19 pandemic, further recessionary impacts and trends in international volumes."
Royal Mail also said it had recruited around 33,000 additional flexible workers to help it deal with the peak season leading up to Christmas.
