Dutch postal company PostNL said on Monday it expects the market for letter post to shrink quickly over the coming years but that it expects to offset this against an increase in parcel delivery services.

The market contracted by almost 12% last year and the company is forecasting further shrinkage of between 9% and 12% this year and beyond.

The company is also planning to increase prices and cut costs, PostNL said in a statement.

Turnover in the final quarter of the year stabilised at €1.2bn while net profit plunged to €19m, largely due to the cost of the ongoing reorganisation. The company booked a loss of €170m over 2013 as a whole on turnover largely unchanged at €4.3bn.

The cost savings planned for the next few years will not involve extra job losses, chief executive Herna Verhagen is quoted as saying by Nos television. Savings will come from the more efficient use of transport and new, cheaper delivery points.