NZ Post has returned to profit, but mail volumes are down.The state-owned enterprise has recorded a $17 million net profit for the year.The result followed a $2m loss last year and came after a major multi-year transformation project, which included changes to its mail network as well as mail and parcel processing systems.Total revenue was up $44m to $1.267 billion.However, total parcels delivered were down by about 3 million to 85 million, while letters delivered fell to 134 million from 158 million the year before.NZ Post chair Dame Paula Rebstock said it was a very pleasing result and an important milestone in the business transformation."Through the disciplined execution of our strategy, NZ Post continues to strengthen its commercial position while delivering value for our customers," Dame Paula said.She said the board was encouraged by the progress achieved during the year and remained focused on supporting sustainable performance, disciplined investment and long-term value creation.The state-owned company declared a dividend of $12.5m.Simeon BrownRNZ / Baz MacdonaldState Owned Enterprises Minister Simeon Brown said NZ Post's return to profitability after several years of losses was encouraging, but a sustained commitment to continued improvement was required."This improved financial performance is welcome and reflects NZ Post's focus on cost management and better operational efficiency," Brown said.However, Brown said the results also highlighted the need for parcel revenue to improve in a competitive market."Group revenue growth for the year was 3.6 percent and while the return on equity of 2.9 percent is an improvement over last year, it remains below the company's cost of capital."Looking ahead, it's important that NZ Post continues to optimise its operations to enhance overall profitability and performance, while delivering an efficient and sustainable service."I expect state-owned enterprises to operate efficiently, maintain strong balance sheets, and return value to New Zealanders."