Royal Mail is poised to reveal its traditional letters business lost more than £100m last year, Sky News has learnt.
Sky's City editor Mark Kleinman said figures to be released next week would show letter volumes and margins were down while costs were up.
In 2009, the letters division managed to make an operating profit of £48m, but in 2010 it plunged into the red - partly as a result of costs from Royal Mail's modernisation programme.
The group as a whole managed to make a modest profit, Kleinman reported.
He added that the release of the figures would underline the case for the urgent privatisation of Royal Mail.
"They will be used by both the company and the Government to demonstrate why further restructuring of Royal Mail, including the injection of private capital, remains essential to securing its future," he said.
Last week proposals formally allowing the sell-off of Royal Mail were passed by MPs (BSE: MPSLTD.BO - news) .
But Kleinman noted that a sale was unlikely for at least a year, as pension liabilities are resolved and ministers decide whether and how to write off a substantial proportion of Royal Mail's £1.7bn of debt.
A new postal services regulatory framework is also being drawn up, which potential investors would want to see before making an offer, he said.
In the meantime, Kleinman added, Royal Mail's new chief executive Moya Greene was working on plans to radically slim Royal Mail's workforce, possibly by as many as 40,000 jobs - according to the Sunday Times.
