Hongkong Post almost doubled its earnings and saw an increase in postal items handled in the past year, despite concerns that traditional postal services are losing their appeal in a wired world. But new Postmaster-General Tam Wing-pong said the agency foresaw a declining trend in coming years and would invest more than HK$1 billion to improve its services. The government postal service - operated as a commercial venture since 1995 - recorded HK$405 million in operational profit in the 2005-06 financial year, compared to HK$224 million the year before, said the former housing deputy director, who took up his new job three months ago. The total number of mail items rose 2.4 per cent to 1.3 billion, compared with 1.27 billion items in the previous year. The postal service handled about 3 million letters a day. Mr Tam attributed the increase to the improved economy and the booming initial public offering market. He said there was no pressure to increase postage fees in the coming year. Business mail dominated the service, with personal letters almost non-existent. Hongkong Post distributed more than 1 million mail items related to IPOs last year, with 560,000 notices of share allocation and 620,000 refund notices. It just handled 760,000 notices related to the record-breaking IPO of Industrial and Commercial Bank of China, which would be listed in Hong Kong tomorrow. But it anticipated a 2 per cent a year drop in mail items in the future because of the increased popularity of alternative communication channels like e-mailing, Mr Tam said. So the department would spend HK$1.4 billion in the next five years to upgrade equipment and renovate some of the 131 post offices to improve efficiency.