The state-owned mail operator recorded a £200m loss within the price-controlled business, which includes the Universal Service, by which it has to ensure delivery of letters to any UK address for the price of a single stamp.
However, it made an overall profit of £162m, down 30.4% on the previous year.
The loss comes just days after Royal Mail said it would challenge regulator Postcomm over its decision to reject a zonal pricing scheme .
Royal Mail Group chief executive Adam Crozier said: "The Universal Service is a huge asset for Royal Mail and for the nation as a whole. It is part of the fabric of our society and is vitally important both to social cohesion and to the UK economy.
"But it is now in the red for the first time – making an estimated loss of around £100m last year, while the overall price-controlled area of our business made an estimated loss of around £200m."
He added it was vital to have the opportunity for a real debate about how the Universal Service should be financed and sustained: "Our vision is to achieve a high-quality, efficient and profitable Universal Service, focused on our social customers and SMEs, and forming the backbone of an innovative, fully competitive, business mail market, provided by an efficient, transformed, integrated and lightly regulated Royal Mail, competing with a variety of rivals – both wholesale and end-to-end.
"Central to achieving that vision is the need to continue to take and execute the often difficult decisions that will turn Royal Mail into a world-class postal services company, competing successfully in the wider communications market."
Royal Mail’s loss was driven by a 3.2% year-on-year decline in the number of letters sent. The drop was in line with other major European postal markets.
The results were, however, boosted by European parcels business GLS and Parcelforce Worldwide, which both saw significant rise in revenues. Profits remained constant due to increased volume-driven costs and competitive pressures.
However, Royal Mail’s pension deficit continued to plague its financial performance. Contributions to the company plan now total more than £800m. Royal Mail is attempting to restructure its pension plan but faces strong opposition from the unions.
The results come as an independent review voiced its concerns about the financial viability of Royal Mail. As reported in this week's PrintWeek , the review said that the loss represented "a substantial threat to the universal service".
