Annual Report • Jul 31, 2018
Annual Report
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CTT – Correios de Portugal, S.A. - Public Company Avenida D. João II, 13, 1999-001 LISBON - PORTUGAL Lisbon commercialregistry and fiscal no. 500 077 568 Share Capital EUR 75,000,000.00
| HIGHLIGHTS OF THE SEMESTER 5 | ||
|---|---|---|
| AWARDS AND RECOGNITIONS 6 | ||
| KEY FIGURES 7 | ||
| PART I – INTERIM MANAGEMENT REPORT 9 | ||
| 1. | STRATEGIC LINES 9 | |
| 2. | POSTAL REGULATORY FRAMEWORK11 | |
| 3. | OPERATIONAL AND FINANCIAL PERFORMANCE 13 | |
| 4. | CTT SHARE PERFORMANCE27 | |
| 5. | SUSTAINABILITY IN CTT'S ACTIVITIES 28 | |
| 6. | MAIN RISKS30 | |
| 7. | SUBSEQUENT EVENTS32 | |
| 8. | DECLARATION OF CONFORMITY33 | |
| PART II – CORPORATE GOVERNANCE35 | ||
| PART III – FINANCIAL STATEMENTS51 | ||
| Interim condensed consolidated financial statements51 | ||
| PART IV –AUDIT REPORT 91 | ||
| CONTACTS93 |
• Increase of Banco CTT's share capital by €6.4m, by means of the transfer of Payshop (Portugal), S.A. from CTT to Banco CTT, in line with what was previously approved by the Boards of Directors of the two companies and the information conveyed at the Capital Markets Day 2015.
• Increase of Banco CTT's share capital by €25m, undertaken by CTT, in line with the financial model submitted to the Bank of Portugal on 6 July 2015.
| € thousand or %, except where indicated | 1H 2018 | 1H 2017 | Δ% 18/17 |
|---|---|---|---|
| Revenues (1) | 355,125 | 352,114 | 0.9% |
| Recurring EBITDA (2) | 46,070 | 52,616 | -12.4% |
| Net profit for the period | 6,278 | 17,695 | -64.5% |
| Recurring EBITDA margin | 13.0% | 14.9% | -1.9 p.p. |
| Capex | 8,265 | 7,187 | 15.0% |
| Operating free cash flow (3) | -14,383 | 14,632 | -198.3% |
| 30.06.2018 | 31.12.2017 | Δ% 18/17 | |
| Net financial cash (debt) (4) | 91,800 | 163,336 | -43.8% |
(1) Excluding non-recurring revenues.
(2) Before non-recurring revenues and costs.
(3) Cash flow excluding changes in Net Financial Services payables, Banking customer deposits and other loans, Credit to bank clients, third parties' "Other operating assets and liabilities" regarding Banco CTT, Investments in securities, Deposits at Bank of Portugal and Other banking financial assets.
(4) Including €67.4m of Banco CTT own cash.
| 1H 2018 | 1H 2017 | Δ% 18/17 | |
|---|---|---|---|
| Addressed mail volumes (million items) | 357.3 | 388.1 | -7.9% |
| Unaddressed mail volumes (million items) | 211.1 | 234.8 | -10.1% |
| Express & Parcels | |||
| Portugal (million items) | 9.4 | 7.8 | 20.4% |
| Spain (million items) | 8.5 | 7.2 | 19.1% |
| Financial Services | |||
| Payments (number of transactions; millions) (1) | 13.1 | 13.9 | -6.0% |
| Savings and insurance (subscriptions; €m) | 1,138.1 | 2,261.4 | -49.7% |
| Banco CTT | |||
| Number of current accounts | 284,521 | 147,394 | 93.0% |
| Client deposits (€m) | 736,396 | 424,293 | 73.6% |
| Number of branches | 212 | 203 | 4.4% |
| Staff | |||
| Staff (FTE) (2) | 12,424 | 12,593 | -1.3% |
| Retail, Transport and Delivery Networks | |||
| Post offices | 580 | 613 | -5.4% |
| Postal agencies (partnership branches) | 1,804 | 1,744 | 3.4% |
| Payshop agents | 4,512 | 4,308 | 4.7% |
(1) Due to the incorporation of Payshop in Banco CTT as of January 2018, the figures regarding Payments were adjusted (proforma), excluding Payshop from Financial Services in the 1st half of 2017.
(2) FTE = Full-time equivalent.
| 1H 2018 | 1H 2017 | Δ% 18/17 | |
|---|---|---|---|
| Customers | |||
| Customer satisfaction (%) | 78.9 | 85.2 | -6.3 p.p. |
| Total number of certified operating units (ISO standard and Retail and Delivery Networks certification) |
1 278 | 1 251 | 2.2 |
| Retail and delivery networks certification (% coverage) | 100 | 100 | 0.0 |
| Overall Quality of Service Indicator (in points) | 118.9 | 138.9 | -20.0 |
| Staff | |||
| Number of accidents(1) | 510 | 531 | -4.0 |
| Training (hours)(1) (2) | 103 341 | 155 518 | -33.6 |
| Women in management positions (1st management level) (%) | 28.6 | 31.6 | -3.0 p.p. |
| Community/Environment | |||
| Value chain - contracts with environmental criteria (%) | 99.4 | 99.6 | -0.2 p.p. |
| Total CO2 emissions, scope 1 and 2 (kton.) (1) (2) | 8.3 | 8.2 | 1.5 |
| Energy consumption (TJ) (1) (2) | 198.1 | 191.8 | 3.3 |
| Eco-friendly vehicles | 353 | 341 | 3.5 |
| Weight of Eco product range in Direct Mail line (%) (1) (2) | 38.8 | 38.2 | 0.6 p.p. |
| Investment in the Community (€ thousand) | 612 | 539 | 13.5 |
(1) Provisional data.
(2) 1H2017 data updated: it was considered training hours, CO2 emissions, energy consumption and Eco product range volumes that were known after the 1H2017 management report release.
The postal sector continues to undergo a period of deep structural change as a result of trends observed globally, particularly digitisation / electronic substitution and the growth of e-commerce. This reality has led to an adaptation of the traditional postal business models with a focus on business diversification, namely the creation of solutions that make the most of the growth of e-commerce and / or focus on financial services, and on improving process efficiency.
Therefore, the CTT strategy is based on two fundamental pillars: (i) Transformation and (ii) Growth, which require significant investment and development initiatives, and which can be summarized in the following objectives and initiatives:
With regard to the postal business, the focus is on implementing the 4 major Transformation Plan initiatives: i) adjustment of human resources policies and reduction of expenses with External Services Supplies (ES&S); ii) optimisation of human resources and rationalisation of non-core assets (238 exits have already been negotiated under this pillar, and a gain of € 8.6 million from the sale of real estate is expected); iii) Optimisation of the RetailNetwork; and iv) reengineering the Distribution Network.
One of the initiatives to be highlighted in the first half of 2018 was the partnership with Sonae for the creation and operation of an e-commerce platform (marketplace). This initiative, aimed at capturing the growth of ecommerce, will be fundamental to contribute to the development of this ecosystem in Portugal, bringing more companies (namely SMEs) to the sale through the digital channels.
In the beginning of the 2nd half of 2018, an agreement for the acquisition of 321 Crédito1,a specialised financial entity operating through a network of car dealers in the attractive used autoloansmarketexpected to continue to show strong growth dynamics. 321 Crédito will allow for the diversification of the existing Banco CTT
1 The completion opf the transaction is subject to the satisfaction of a set of conditions precedent, including inter alia the customary approvals from the competition and the banking regulatory authorities (CTT expects the acquisition to be concluded in the 1st quarter of 2019).
product portfolio with a profitable consumer credit business and optimise the Banco CTT balance sheet, improving its loan-to-deposits ratio from 20% to over 60%. This was one more logical and important step in Banco CTT's strategy of becoming an integrated player in retails financial services, thus also contributing the CTT's diversification strategy.
5. Upgrade technology and the data-management platform, enabling the Company to rapidly develop innovative, value-added offers, guarantee the quality of service and a continuous improvement in customer experience, guarantee efficiency and resource optimisation, and strengthen the decision-making process by improving management information.
From the viewpoint of the European Commission (EC), the cross-border parcel delivery services comprise an essential element to enhance e-commerce across the entire EU. Within the scope of a package of measures to be developed to improve consumer and corporate access to digital goods and services, presented in 2016 by the EC on 18 April 2018, the European Parliament and the Council approved Regulation EU 644/2018 relative to the cross-border parcel delivery services, aimed at increasing the transparency of prices and the regulatory supervision of these services. The Regulation, which entered into force on 22 May 2018, entails the publication by the European Commission, on a specific website for the purpose, of the public tariffs of the cross-border delivery service providers and grants the regulators more powers to monitor the parcel delivery market.
In this context, European postal operators jointly implemented the Interconnect, project, which essentially entails 5 commitments: flexible delivery options, return solutions, expansion of the track and trace system, better quality of service for the customer, and harmonised labels. The goal of this project is to thereby remove obstacles that dissuade consumers from making online purchases outside their country by equipping vendors with more flexible efficient delivery solutions with a single standard for customers and, as such, maximise growth potential in cross-border electronic commerce for postal operators and contribute to the development of the Single Digital Market.
Under the criteria for formation of prices as established by an ANACOM resolution of 21 November 20142, ANACOM approved the universal service pricing proposal presented by CTT on 15 February 2018 by a resolution of 23 March 2018. The prices inherent to this proposal, which complied with the established price formation principles and criteria, became effective on 2 April 2018.
This update corresponded to an average annual change of 4.5% in the price of the basket of letter mail, editorial mail and parcel services, not including the universal service offer to bulk mail senders, to which special prices apply.
As regards special prices for postal services included in the Universal Service3 that apply to bulk mail senders, these were also updated on 2 April 2018, following the proposal submitted to the Regulator on 22 March 2018.
Under the company's tariff policy for 2018, the mentioned updates correspond to an average annual change of 4.1% in prices, also reflecting the effect of the updating of prices for reserved services (service of judicial and other postal notifications) and for special prices for bulk mail.
Following the Draft Decision approved on 11 January 2018, on 18 July ANACOM communicated the final decision on the quality of service criteria applicable to the provision of the postal universal service for 2019 and 2020.Compared to the Draft decision, the 24 quality of service indicators aremaintained, but the reliability targets for the routeing times of ordinary mail, bulk mail, ordinary parcels, and newspapers and periodicals released at greater than weekly intervals were revised downwards and set at 99.7%, instead of the 99.9% laid down in the Draft Decision. Contrary to what was proposed in the Draft Decision, the new indicators shall not apply from 01 July 2018, but rather from 01 January 2019 onwards.
The new set of quality of service indicators, which compare with the previous 11 indicators, as well as the setup of much more demanding objectives for some of them, shows that they go well beyond the current European practices and trends in this field.
2 Under article 14(3) of Law no. 17/2012, of 26 April, amended by Postal Law no. 160/2013, of 19 November, and by Law no. 16/2014, of 4 April.
3 As amended by article 4 of Decree-Law no. 160/2013, of 19 November.
On 18 July 2018, ANACOM also communicated the decision on the price formulation criteria for the services comprising the universal postal service for the three-year period of 2018-2020 following the Draft Decision approved on 11 January 2018. In 2018 the rules currently in force shall apply, as laid down by ANACOM in 2014. The new rules shall be applicable to the prices in force in 2019 and 2020 and set a maximum annual price change of the basket of letter mail, editorial mail and parcels services (non-reserved services), linked to the inflation rate (CPI), including inflation adjustment factors (CPIAF) and volume adjustment factors (VAF), which should take into account the differences that may occur between the actual and the predicted values for those variables.
In 2019 and 2020, the weighted average change in the prices of those services may not exceed, in average nominal terms, CPI + CPIAF -1.33% + VAF. However, in view the modification in the draft decision regarding the methodology to forecast the volumes of those services in the 2018-2020 period, this modification is still subject to public consultation. Hence, the maximum annual price change applicable to the basket of nonreserved services is still pending the final decision to be adopted on said volume forecast methodology.
As regards the services of judicial and other postal notifications (services reserved4 to CTT), a maximum annual price change of their prices is also set out, which is pegged to same factors considered for the basket of non-reserved services. In 2019 and 2020, the weighted average change in prices of these services in each of these years, may not exceed, in average nominal terms, the CPI + CPIAF – 4.4% + VAF 5.
As the Universal Postal Service provider and in order to provide a standardised and non-discriminatory service to operators that wish to use the Universal Service network, as of February 2016, CTT made available to postal operators with an individual license an offer to access its network that is deemed competitive and that safeguards the network's security and the Universal Service provision efficiency. This offer consists of a basic service of collection, transport, sorting and delivery of non-priority letter mail with a maximum weight of 2 kg that allows items to be sent nationally or internationally using the Business Mail counters of Lisbon, Taveiro (Coimbra) and Maia (Porto) as access points.
With the aim of responding to the competition concerns voiced by the Competition Authority (AdC) within the scope of network access, CTT presented, on 22 December 2017, under the terms and for the purposes set out in article 23 of Law no. 19/2012, of 8 May (Competition Law), a number of commitments which consist in extending the scope of the postal network access offer (access offer), made available to competing postal operators, under the following terms:
Following the public consultation, on 23 March 2018, the commitments presented by CTT were subject to slight changes, having the AdC accepted these commitments on 5 July 2018, which will be implemented within six months as of its notification.
4 In 2017 these services represented circa 0.5% of the total volumes of the Universal Postal Service.
5 Instead of CPI + CPIAF – 11.6% + VAF, as provided for in the draft decision.
This section summarises the consolidated results achieved by CTT ("Company") and the consolidated assets, liabilities and financial position of the Company as at 30 June 2018. It should be read in conjunction with the consolidated financial statements and the accompanying notes, which have more detailed information.
The present review includes the consolidation of the activities of the parent Company and its subsidiaries as included in note 8 of the consolidated financial statements. In addition, a review is carried out by CTT without consolidating Banco CTT, which is treated as a financial investment through the equity method:
It is important to highlight the following relevant facts occurred during the first half of 2018 for a better understanding of the Company accounts:
Consolidated revenues increased by 0.9% (+€3.0m) compared to the first half of 2017, driven by growth in the Express & Parcels segment (+€11.1m; +17.7%) and Banco CTT (+€2.0m; +23.3%).
The evolution of the revenues was negatively affected by the Financial Services segment (-€9.4m; -31.7%) with the reduction in the placement of Public Debt products, reflecting the effect of the reduction in the annual average interest rates offered.
The Mail segment reflected the reduction of 7.9% in mail volumes, with a drop in external revenues of 0.3% (-€0.7m) in Mail and SU Parcels, offset by a growth of 12.6% (+€0.5m) in business solutions and 37.5% (+€1.6m) in retail products, of which €1.7m are related with the sale of lottery. This segment posted a performance improvement in the second quarter of 2018: revenues rose from -0.8% in the first quarter of 2018 vs. the same period of the last year to +1.4% in the second quarter), not only due to the updating of regulated prices, but also to the positive evolution of the level of discounts and the product mix.
Recurring operating costs increased by 3.2% (+€9.6m) vs. the first half of 2017, particularly external supplies and services in the Express & Parcels and Banco CTT segments which grew +€9.1m (+18.0 %) and +€2.8m (+33.2%), respectively, as a result of activity increase.
Particular mention should be made of direct costs in the Group, especially those related to the transportation of mail and parcels, delivery, cargo, banking and courier, which grew by 21.2% (+€8.3m) and, conversely, the fall in IT costs of 10.2% (-€1.4m) and of -2.3% in Facilities (-€0.5m).
The operating activity generated earnings before non-recurring items, interest, taxes, impairments, depreciation and amortisation (recurring EBITDA) of €46.1m, -12.4% (-€6.5m) than those obtained in the same period of the previous year, with an EBITDA margin of 13.0% compared to 14.9% in the first half of 2017. The Company's operating performance has been improving, as can be seen in the evolution of the first and second quarters, with an evolution of -18.9% and -5.0%, respectively. This evolution of performance has a very positive profile, considering that:
Net profit was mainly affected by non-recurring costs, totalling €17.2m, especially those arising from the operational transformation plan in progress and studies and advisory services for strategic projects, amounting to €15.3m, of which €13.2m are related to staff restructuring costs.
In the first half of 2018, CTT achieved a consolidated net profit attributable to equity holdersof €6.3m, -64.8% (-€11.5m) than in the previous year, corresponding to a consolidated net profit per share of €0.04, compared to €0.12 of the first half of 2017.
| Thousand Euros | 1H2018 | 1H2017 | Δ% 18/17 |
|---|---|---|---|
| Revenues | 355,125 | 352,114 | 0.9% |
| Sales and services rendered | 343,659 | 340,466 | 93.8% |
| Sales | 9,211 | 7,603 | 21.1% |
| Services rendered | 334,448 | 332,863 | 0.5% |
| Financial margin | 3,315 | 1,161 | 185.5% |
| Other operating income | 8,151 | 10,486 | -22.3% |
| Operating costs excluding impairments, provisions, depreciation/amortisation and non-recurring costs |
309,055 | 299,497 | 3.2% |
| Cost of sales | 6,391 | 4,968 | 28.6% |
| External supplies and services | 126,971 | 116,206 | 9.3% |
| Staff costs | 169,837 | 171,367 | -0.9% |
| Other operating costs | 5,855 | 6,956 | -15.8% |
| Earnings before depreciation/amortisation, impairments and provisions, non-recurring results, interest and taxes (recurring EBITDA) |
46,070 | 52,616 | -12.4% |
| Impairment of accounts receivable, net | (292) | 110 | 365.5% |
| Provisions, net | 507 | (102) | -597.1% |
| Impairment of other financial banking assets | 142 | - | n.a. |
| Impairment of non-depreciable assets | - | - | n.a. |
| Depreciation/amortisation and impairment of investments, net | (14,876) | (14,186) | 4.9% |
| Earnings before non-recurring results, financial income and taxes (recurring EBIT) |
31,551 | 38,439 | -17.9% |
| Company restructuring | (13,314) | (2,653) | 401.8% |
| Costs associated to studies and advice services for strategic projects |
(2,016) | (4,555) | -55.7% |
| Other non-recurring income and costs | (1,885) | (677) | 178.4% |
| Earnings before interest and taxes | 14,335 | 30,555 | -53.1% |
| Financial results, net | (2,759) | (2,400) | -15.0% |
| Gains/losses in associated companies | 98 | 0 | n.a. |
| Earnings before taxes (EBT) | 11,674 | 28,155 | -58.5% |
| Income tax for the period | (5,396) | (10,460) | -48.4% |
| Net profit before non-controlling interests | 6,278 | 17,695 | -64.5% |
| Non-controlling interests | 27 | (50) | 154.0% |
| Net profit for the period attributable to equity holders | 6,250 | 17,745 | -64.8% |
Note: Revenues and costs exclude non-recurring items.
| Thousand Euros | 1H2018 | 1H2017 proforma |
Δ% 18/17 |
|---|---|---|---|
| 270,571 | 269,810 | 0.3% | |
| Express & Parcels | 73,896 | 62,759 | 17.7% |
| Financial Services | 20,213 | 29,596 | -31.7% |
| Banco CTT | 10,753 | 8,722 | 23.3% |
| CTT Central Struture | 48,400 | 52,735 | -8.2% |
| Intragroup eliminations | (68,708) | (71,509) | -3.9% |
| Revenues | 355,125 | 352,114 | 0.9% |
Note: Revenues exclude non-recurring items.
The Mail segment, which includes the letter mail postal service revenues of CTT, including the USO (Universal Service Obligation), represents the greatest weight in terms of revenues, amounting to €270.6m, an increase of 0.3% (+€0.8m) vis-à-vis the first half of 2017.
The decline of 7.9% in mail volumes corresponded mostly to a decrease of €3.6m (-1.9%) in domestic mail, while registered mail countered this trend (growing by 1.9%, +€1.2m), and to a reduction of €1.3m (-12.8%) in addressed advertising mail. In the first half of 2018, the Company benefited from a particularly positive performance in registered mail as a result of several mailings from the State and Banking and Insurance sectors that improved this revenue.
The less positive mail volumes evolution was mitigated by the raise in the average price per mail item, which benefited not only from the regulated price update (+3.6% vs. the same period of the previous year), but also from a positive evolution of the level of discounts and product mix, and also the growth of €4.8m (+39.3%) in inbound international mail, maintaining the high growth trend of the volumes received from Asian countries. The Mail business also saw a positive evolution in:
With regard to the other revenues of the Mail segment, the increase of €0.3m (+24.2%) in pro-rata VAT recovery was absorbed by the decrease in favourable exchange rate differences (-€1.3m;-72.3%) following the appreciation of the SDR6 against the Euro in the first six months of 2018 (+1.6% vs.December 2017).
The Express & Parcels segment, with €73.9m in revenues, recorded an increase of €11.1m (+17.7%) compared to the same period of the previous year, as a result of business growth in all geographies, in particular:
6 Special Drawing Rights
There is an inorganic growth component related to the integration of Transporta in the first half of the year, as when compared to the first half of 2017 it had a positive impact of +€4.6m on revenue performance , turning a 10.7% increase in the revenue performance of the Expresso & Parcels segmentinto a 17.7% increase.
The Financial Services segment, with €20.2m of revenues, registered a decrease of €9.4m (-31.7%) vs. the first half of 2017.
Revenues decreased impacted by the reduction in the placement of one of the Public Debt products, which was replaced, in October 2017, by another one with a lower interest rate (2.25% vs. 1.38% - annual average interest rates for 5-year Treasury Certificates Poupança Mais (CTPM) and 7-year Treasury Certificates Poupança Crescimento (CTPC), respectively), therefore the amounts handled within the issuance of Public Debt Certificates fell by 52.6%, representing a reduction in commissions of €9.4m (-56.6%).
In addition, the commission received by the Company for marketing this IGCP product was reduced by 0.05% in May 2018. In order to face this framework, the Company has been developing a set of commercial initiatives to explain the advantages of this product and the reasons to maintain its remuneration compared to other products on the market, having achieved a recovery between the first and second quarters of 2018, where the reduction in overall revenues from Financial Services external revenues went from from -38.8% to -27.7%. It is also worth noticing the decline of €0.4m (-5.9%) in payment solutions (in particular invoices).
The Banco CTT segment reached external revenues of €8.9m, an increase of +€2.2m (+33.9%), mainly leveraged by the financial margin growth of +€2.2m.
The incorporation of Payshop in this segment contributed +€0.2m (+7.7%) of external revenues in payment solutions, mainly in the collection of invoices and Internet-related collections.
The CTT Central Structure showed a decrease in revenues (-€4.3m; -8.2%), due tothe reduction in real estate disposals and in the costs, due to of the decrease of this segment costs. Specifically, in the first half of 2017 the following took place:
| Thousand Euros | 1H2018 | 1H2017 | Δ% 18/17 |
|---|---|---|---|
| Cost of sales | 6,391 | 4,968 | 28.6% |
| External supplies and services | 126,971 | 116,206 | 9.3% |
| Staff costs | 169,837 | 171,367 | -0.9% |
| Other operating costs | 5,855 | 6,956 | -15.8% |
| Operating costs | 309,055 | 299,497 | 3.2% |
Note: Excluding non-recurring items.
7 Cost of sales + ES&S + Staff costs + other operating costs (excludes non-recurring items).
Recurring operating costs amounted to €309.1m, +3.2% (+€9.6m) compared to the first half of 2017.
The cost of sales increased €1.4m (+28.6%) accompanying the sales evolution, namely in what concerns lottery.
The recurring external supplies and services costs increased by +€10.8m (+9.3%), mostly in the Express & Parcels segment (+€9.1m; +18.0%), in the Banco CTT segment (+€2.8m; 33.2%) and in the Mail segment (+€0.9m; +1.8%).
The direct costs ofCTT Group (which represent 18.4% of the total operating revenues in the first half of 2018), especially those related to the transportation of mail and parcels, delivery, cargo, banking and courier services, which grew by 21.2% (€8.3m) in line with the increase in activity, are noteworthy. The consolidation of the different Operations that the Group has been integrating into its structure will allow, in a near future, the capture of operational synergies between the networks that will be translated into a costs evolution similarto the external revenues evolution.
The recurring operating costs were negatively impacted by the fuel price increase, which resulted in an increase in fleet costs, namely fuel (+€0.2m; +5.7%). The increase in vehicle maintenance costs (+€0.2m, +16.2%) reflects the renewal of the operational fleet (717 vehicles) and the respective reconditioning costs increase, which is mostly reflected in the Mail segment as it includes the functions of transport and delivery.
The Company reduced IT costs by €1.4m (-10.2%) as a result of several ongoing initiatives to improve the efficiency of IT spending, which include areas of communications and systems administration, and the renegotiation of outsourcing contracts. This impact was mainly reflected in the CTT Central Structure, leading to a reduction in the internal provision of these services and, consequently, reducing the costs allocated to the Mail segment.
The recurring staff costs decreased €1.5m (-0.9%), reflecting the strengthening of the HR optimisation programme initiated in the previous year. As at 30 June 2018, the number of CTT employees (permanent and on fixed-term contract) was 12,599, which is 312 (-2.4%) below the same period in 2017.
The salary revision agreed with the organisations representing the workers with effect as of January 2018 represented an increase of €1.3m in staff costs in the first half of the year.
These increases were absorbed by the revision of the performance bonuses, which had an impact of -€2.8m (1H2018 vs. 1H2017), reductions in health care costs, social welfare costs, and safety and hygiene at work of €0.3m and the -€0.7m of bonuses related to Financial Services, as a result of the decrease in the revenues of this segment.
The recurring other operating costs decreased by €1.1m (-15.8%), largely due to the unfavourable exchange rate differences (-€1.6m; -79.0%), effecting Mail segment, and whose value is similar to the positive impact on incomes previously mentioned.
Operating costs by segment are as follows:
| Recurring operating costs by segment | ||||||||
|---|---|---|---|---|---|---|---|---|
| Thousand Euros | 1H2018 | 1H2017 proforma |
Δ% 18/17 |
|||||
| 224,884 | 225,534 | -0.3% | ||||||
| Express & Parcels | 72,029 | 62,003 | 16.2% | |||||
| Financial Services | 13,084 | 15,284 | -14.4% | |||||
| Banco CTT | 19,366 | 15,450 | 25.3% | |||||
| CTT Central Struture | 48,400 | 52,735 | -8.2% | |||||
| Intragroup eliminations | -68,708 | -71,509 | -3.9% | |||||
| Operating costs | 309,055 | 299,497 | 3.2% | |||||
Note: excludes non-recurring items.
The recurring EBITDA8 amounted to €46.1m in the first half of 2018, -12.4% (-€6.5m) than the one recorded in the same period of the previous year.
| Recurring EBITDA by segment | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Thousand Euros | 1H2018 | Margin | 1H2017 proforma |
Margin | Δ% 18/17 |
Δ Margin | |||
| 45,687 | 16.9% | 44,276 | 16.4% | 3.2 | 0.5 p.p. | ||||
| Express & Parcels | 1,867 | 2.5% | 756 | 1.2% | 147.0 | 1.3 p.p. | |||
| Financial Services | 7,129 | 35.3% | 14,313 | 48.4% | -50.2 | -13.1 p.p. | |||
| Banco CTT | (8,613) | n.a. | (6,728) | n.a. | 28.0 | n.a. | |||
| Recurring EBITDA | 46,070 | 13.0% | 52,616 | 14.9% | -12.4 | -2.0 p.p. |
Note: Excluding non-recurring items.
8 Recurring EBITDA = Operating results + amortisation and depreciation + net change in provisions and impairment losses (does not include non-recurring revenues and costs, such as company restructuring, impairment of investment properties, provisions for onerous contracts and labour contingencies).
In the first half of 2018 CTT recorded negative non-recurring results of €17.2m, of which €15.1m affected EBITDA and €2.2m are related to depreciation / amortisation, impairment and net provisions (below EBITDA).
| Thousand Euros | 1H2018 | 1H2017 | ΔABS 18/17 |
|---|---|---|---|
| Other operating income | (10) | (0) | 10 |
| Capital gains from the sale of real estate | (10) | (0) | 10 |
| External supplies and services | 1,566 | 3,830 | (2,264) |
| Costs associated to studies and advice services for strategic projects | 1,566 | 3,830 | (2,264) |
| Staff costs | 13,314 | 2,854 | 10,460 |
| Indemnities for termination of employment contracts by mutual agreement - | |||
| Operational Transformation Plan | 13,234 | 2,071 | 11,163 |
| Other indemnities for termination of employment contracts by mutual agreement | 80 | 166 | (86) |
| Completion of the "Long-term variable remuneration – Share Plan | 0 | 617 | (617) |
| Other costs | 182 | 185 | (3) |
| Donation and others | 182 | 185 | (3) |
| Non-recurring results to EBITDA | 15,052 | 6,869 | 8,183 |
| Depreciation/amortisation and impairment of investments, net | 443 | 715 | (271) |
| Incremental costs in the Retail Network with Banco CTT | 443 | 715 | (271) |
| Impairment of accounts receivable, net | 0 | 415 | (415) |
| Closing of franchisees in Spain | - | 415 | (415) |
| Provisions, net | 1,720 | (115) | 1,836 |
| Labour contingencies | 320 | (115) | 436 |
| Notification issued to Tourline from the Spanish National Commission on Markets | |||
| and Competition | 1,400 | 0 | 1,400 |
| Results below EBITDA | 2,164 | 1,015 | 1,149 |
| Non-recurring results to EBIT | 17,216 | 7,884 | 9,332 |
Non-recurring results by segment are as follows:
| Non-recurring results | |||
|---|---|---|---|
| Thousand Euros | 1H2018 | 1H2017 | ΔABS 18/17 |
| Non-recurring revenues | 10 | - | n.a. |
| CTT Central Struture | 10 | - | n.a. |
| Non-recurring operating costs | 15,063 | 6,869 | 8,193 |
| 7,167 | 1,093 | 6,074 | |
| Express & Parcels | 360 | 1,572 | (1,213) |
| Financial Services | 361 | 7 | 354 |
| Banco CTT (including Payshop) | 140 | 2,127 | (1,987) |
| CTT Central Struture | 7,035 | 2,070 | 4,965 |
| Recurring EBITDA | (15,052) | (6,869) | 8,183 |
| (7,167) | (1,093) | 6,074 | |
| Express & Parcels | (360) | (1,572) | (1,213) |
| Financial Services | (361) | (7) | 354 |
| Banco CTT (including Payshop) | (140) | (2,127) | (1,987) |
| CTT Central Struture | (7,024) | (2,070) | 4,955 |
| Non-recurring costs below EBITDA | 2,164 | 1,015 | 1,149 |
| 443 | 721 | (278) | |
| Express & Parcels | 1,400 | 415 | 985 |
| Financial Services | - | - | - |
| Banco CTT (including Payshop) | - | - | - |
| CTT Central Struture | 320 | (122) | 442 |
| Recurring EBIT | (17,216) | (7,884) | 9,332 |
| (7,610) | (1,814) | 5,796 | |
| Express & Parcels | (1,760) | (1,988) | (228) |
| Financial Services | (361) | (7) | 354 |
| Banco CTT (including Payshop) | (140) | (2,127) | (1,987) |
| CTT Central Struture | (7,345) | (1,948) | 5,397 |
| Thousand Euros | Express & Parcels |
Financial Services |
Banco CTT | Central CTT Structure |
Intragroup eliminations |
Others non allocated |
Total | |
|---|---|---|---|---|---|---|---|---|
| Other operating income | - | - | - | - | 10 | - | - | 10 |
| External supplies and services | (727) | - | - | (137) | (702) | - | - | (1,566) |
| Staff Costs | (6,433) | (360) | (361) | (3) | (6,157) | - | - | (13,314) |
| Other costs | (7) | - | - | - | (175) | - | - | (182) |
| Non-recurring results that affect EBITDA | (7,167) | (360) | (361) | (140) | (7,024) | - | - | (15,052) |
| Depreciation/amortisation and impairment of investments, net |
(443) | - | - | - | - | - | - | (443) |
| Impairment of accounts receivable, net | - | - | - | - | - | - | - | - |
| Impairment of non-depreciable assets | - | - | - | - | - | - | - | - |
| Provisions net | - | (1,400) | - | - | (320) | - | - | (1,720) |
| Non-recurring results that affect EBIT | (7,610) | (1,760) | (361) | (140) | (7,345) | - | - | (17,216) |
| Thousand Euros | Express & Parcels |
Financial Services |
Banco CTT | Central CTT Structure |
Intragroup eliminations |
Others non allocated |
Total | |
|---|---|---|---|---|---|---|---|---|
| Other operating income | 0 | - | - | - | - | - | - | 0 |
| External supplies and services | (618) | (195) | (7) | (2,127) | (883) | - | - | (3,830) |
| Staff Costs | (465) | (1,377) | - | - | (1,012) | - | - | (2,854) |
| Other costs | (10) | - | - | - | (175) | - | - | (185) |
| Non-recurring results that affect EBITDA | (1,093) | (1,572) | (7) | (2,127) | (2,070) | - | - | (6,869) |
| Depreciation/amortisation and impairment of investments, net |
(721) | - | - | - | - | - | 7 | (715) |
| Impairment of accounts receivable, net | - | (415) | - | - | - | - | - | (415) |
| Impairment of non-depreciable assets | - | - | - | - | - | - | - | - |
| Provisions net | - | - | - | - | 115 | - | - | 115 |
| Non-recurring results that affect EBIT | (1,814) | (1,988) | (7) | (2,127) | (1,955) | - | 7 | (7,884) |
The financial results posted a negative amount of €2.7m, representing a decrease of 10.9% (-€0.3m) in relation to the same period of the previous year.
Interest income and financial revenues decreased by 91.2% (-€0.3m) when compared with the first half of 2017, due to the low remuneration rates of term deposits, to lower liquidity levels and to the preservation of a conservative policy regarding liquidity applications by CTT.
Financial costs incurred amounted to €2.8m, mainly incorporating the financial costs of €2.6m associated with the financial update of the employee benefits liability, as well as, but of little relevance, interest associated with financial leasing operations and bank loans (€0.2m).
| Financial results | ||||||||
|---|---|---|---|---|---|---|---|---|
| Thousand Euros | 1H2018 | 1H2017 | Δ% 18/17 |
|||||
| Interest income | 25 | 285 | -91.2% | |||||
| Interest expenses | (2,784) | (2,685) | 3.7% | |||||
| Interest expenses (financial) | (151) | (72) | 109.7% | |||||
| Interest costs with employee benefits (accounting) | (2,632) | (2,613) | 0.7% | |||||
| Gains/losses in associated companies | 98 | 0 | n.a. | |||||
| Financial results | (2,661) | (2,400) | -10.9% |
In the first half of 2018 CTT achieved a consolidated net profit attributable to equity holders of €6.3m, 64.8% lower than the one obtained in the same period of the previous year, corresponding to a net margin of 1.8% (5.0%in 1H2017).
The Group's investment amounted to €8.3m, +15.0% (-€1.1m), compared to the first half of 2017, of which:
| Consolidated statement of financial position | |||
|---|---|---|---|
| Thousand Euros | 30.06.2018 | 31.12.2017 | Δ% 18/17 |
| Non-current assets | 867,084 | 678,474 | 27.8% |
| Current assets | 925,516 | 930,291 | -0.5% |
| Total assets | 1,792,600 | 1,608,765 | 11.4% |
| Equity | 131,783 | 183,991 | -28.4% |
| Total liabilities | 1,660,817 | 1,424,774 | 16.6% |
| Non-current liabilities | 272,171 | 282,738 | -3.7% |
| Current liabilities | 1,388,646 | 1,142,037 | 21.6% |
| Total equity and liabilities | 1,792,600 | 1,608,765 | 11.4% |
Total assets reached €1,792.6m (+€183.8m vs.31.12.2017), of which €658.0m (+€208.1m vs 31.12.2017) are related to applications, financial assets and credit held by Banco CTT broken down as follows:
In the total assets it is worth noticing the decrease in cash and cash equivalents of €35.1m (-5.6%).
In the first half of 2018 there is also the effect of:
Equity decreased by €52.2m (-28.4%) following the dividend distribution for the year 2017 (€57.0m), which occurred in May 2018, with the appropriation of €27.3m from the net profit for the 2017 financial year, €14.4m booked as retained earnings and €15.4m booked as free reserves. It's also noted the decrease of €1.5m related to the effect of the adoption of IFRS 9 and IFRS 15, as mentioned above.
Total liabilities increased by €236.0m (+16.6%), of which the increase of €140.7m (+52.1%) related to net financial services payables (+€91.1m in CNP money orders –referring to the money orders received from the National Pensions Centre (CNP) with payment date to the corresponding pensioners in the month after the closing of the financial period - reflecting the payment of holiday bonuses in June), and +€117.7m of banking client deposits from Banco CTT.
Liabilities related toemployee benefits (post-retirement and other long-term benefits) inthe first half of 2018 amounted to €267.7m, -0.9% (-€2.3m) when compared to December 2017, and no actuarial gains and losses were recorded in the period, therefore the reduction derives from the effect of the payments, which more than offset the increase in liabilities arising from Interest cost of the year current interest and service expenses.
| and other long-term employee benefits | |||
|---|---|---|---|
| Thousand Euros | 30.06.2018 | 31.12.2017 | Δ% 18/17 |
| Liabilities | 267,723 | 270,020 | -0.9% |
| Healthcare | 249,554 | 253,972 | -1.7% |
| Staff (suspension agreements) | 3,265 | 3,312 | -1.4% |
| Other long-term employee benefits | 14,499 | 12,340 | 17.5% |
| Pension plan (Transporta) | 345 | 356 | -3.1% |
| Other benefits | 60 | 40 | 50.0% |
The net change in cash and cash equivalents amounted to -€35.1m, which is mainly the result of:
The adjusted cash flow in the first half of 2018 was -€79.4m, as a result of the dividend payment (€57.0m) and the adjusted operating cash flow, which amounted to -€14.4m. Excluding non-recurring items, especially the ones related to the payment of indemnities for termination of employment contracts by mutual agreement (€22.2m), the operating cash flow would be positive, of €9.6m.
| Cash flow | ||||||
|---|---|---|---|---|---|---|
| Reported | Adjusted* | |||||
| Thousand Euros | 1H2018 | 1H2017 | ΔABS 18/17 |
1H2018 | 1H2017 proforma |
ΔABS 18/17 |
| Cash flow from operating activities | 189,908 | 296,718 (106,809) | 1,109 | 35,846 | (34,736) | |
| Cash flow CTT excluding FS and Banco CTT Banco CTT cash flow |
3,636 (2,526) |
42,239 (6,393) |
(38,604) 3,867 |
|||
| Cash flow from investment activities | (133,485) | (117,901) | (15,584) | (15,492) (21,214) | 5,721 | |
| Capex | (17,135) | (22,927) | 5,792 | (17,135) | (22,927) | 5,792 |
| of which Banco CTT | (3,582) | (4,428) | 847 | (3,582) | (4,428) | 847 |
| Banco CTT financial assets** | (117,993) | (96,687) | (21,305) | |||
| Other | 1,643 | 1,713 | (70) | 1,643 | 1,713 | (70) |
| Operating free cash flow | 56,423 | 178,816 (122,393) | (14,383) | 14,632 | (29,015) | |
| Cash flow from financing activities | (64,992) | (73,770) | 8,778 | (64,992) (73,770) | 8,778 | |
| of which dividends | (57,000) | (72,000) | 15,000 | (57,000) | (72,000) | 15,000 |
| Other*** | (26,547) | (3,566) | (22,981) | - | 135 | (135) |
| Net change in cash | (35,116) | 101,480 (136,596) | (79,375) (59,003) | (20,371) |
* Cash flow from operating activities excluding the changes in the financial services receivables/payables and Cash Flow Statement items: "Banking customer deposits and other loans", "Credit to bank clients", "Investment securities", "Other banking financial assets", "Demand deposits at Bank of Portugal", "Other banking financial assets", third parties "Other receivables/payments" regarding Banco CTT.
** Including Investment securities and other banking financial assets held by Banco CTT.
*** These figures were not considered under Cash and equivalents in the Cash flow Statement. However, they are included in Cash and equivalents in the Balanced Sheet.
| Net financial cash, excluding third parties receivables/payments, was positive by €91.8m. | |
|---|---|
| Net cash / (debt) | ||||
|---|---|---|---|---|
| Thousand Euros | 30.06.2018 | 31.12.2017 | ΔABS 18/17 |
|
| Cash and cash equivalents | 591,710 | 626,825 | (35,116) | |
| Financial Services payables (net) | (402,420) | (265,896) | 136,524 | |
| Banco CTT deposits & other financial liabilities | (754,823) | (637,112) | 117,711 | |
| Banco CTT financial assets & credits & other | 659,872 | 449,896 | 209,976 | |
| Own Cash (1) | 94,339 | 173,714 | (79,375) | |
| Short and long-term debt | (2,540) | (10,378) | (7,838) | |
| Net financial cash (debt) | 91,800 | 163,336 | (71,536) |
(1) Including €67.4m of Banco CTT own cash.
Note: The company holds financial leasing operations (related to the acquisition of basic equipment and vehicles), bank loans in Corre in order to fund operating activities and a cash pooling system used within CTT scope, particularly by Tourline, to support the activity.
The analysis of the balance sheet and income statement without the full consolidation of Banco CTT allows for a clear view of the CTT Group without the assets / liabilities related to the activity of Banco CTT (including Payshop).
The economic and financial position of the CTT Group excluding Banco CTT (including Payshop) from the consolidation perimeter, being accounted as a financial participation according to the equity method, would be as follows:
| Consolidated income statement | |||
|---|---|---|---|
| Thousand Euros | 1H2018 | 1H2017 | Δ% |
| proforma | 18/17 | ||
| Revenues | 348,033 | 346,782 | 0.4% |
| Operating costs | (308,263) | (292,179) | 5.5% |
| EBITDA | 39,770 | 54,603 | -27.2% |
| EBITDA margin | 11.4% | 15.7% | -4.3 p.p. |
| Depreciations, amortisations, impairments & provisions | (15,279) | (13,754) | 11.1% |
| Earnings before financial income and taxes (EBIT) | 24,492 | 40,848 | -40.0% |
| Financial results | (10,625) | (10,593) | -0.3% |
| Gains/losses in associated companies | (7,865) | (8,182) | 3.9% |
| Banco CTT (including Payshop) | (7,963) | (8,182) | 2.7% |
| Others | 98 | - | n.a. |
| Earnings before taxes | 13,866 | 30,256 | -54.2% |
| Income tax for the period | (7,589) | (12,561) | -39.6% |
| Net profit for the period | 6,278 | 17,695 | -64.5% |
| Non-controlling interests | 27 | (50) | 154.0% |
| Net profit for the period attributable to equity holders | 6,250 | 17,745 | -64.8% |
| Consolidated statement of financial position | |||
|---|---|---|---|
| Thousand Euros | 30.06.2018 31.12.2017 proforma |
Δ% 18/17 |
|
| Non-current assets | 415,195 | 413,409 | 0.4% |
| Current assets | 620,553 | 557,340 | 11.3% |
| Total assets | 1,035,748 | 970,749 | 6.7% |
| Equity | 131,783 | 183,991 | -28.4% |
| Total liabilities | 903,965 | 786,758 | 14.9% |
| Non-current liabilities | 272,129 | 282,652 | -3.7% |
| Current liabilities | 631,836 | 504,106 | 25.3% |
| Total equity and liabilities | 1,035,748 | 970,749 | 6.7% |
Impact of the exclusion of Banco CTT from the consolidation perimeter on the financial position (Balance Sheet) in 1H2018:
During the 1st half of 2018, CTT paid a dividend of €0.38 per share and the CTT share price depreciated by 14.29%. Hence, the total shareholder return or TSR (capital gain + dividend, calculated on the basis of the share price as at the end of 2017) in the period was -3.16%. During the same period, the PSI 20 had a total shareholder return of 6.43%.
In terms of share price appreciation, the best performer of the EU postal sector in the first half of 2018 was Poste Italiane, whose share price appreciated by 14.26% as opposed to Bpost and Deutsche Post's which depreciated by 46.70% and 29.6%, respectively.On the same basis, the PSI 20 index appreciated by 2.60%in the first half of 2018.
1 Royal Mail share price in euros
During the 1st half of 2018, circa 155 million CTT shares were traded, corresponding to a daily average of 1.2 million shares, which translates into an annualised turnover ratio of 207% of the share capital, which shows the strong share liquidity. As at the end of the semester, the CTT share price at market close was €3.006.
Quality reached 118.9 points in the 1st half of 2018, a result compared to a target of 100 stipulated by the Regulator. In terms of perceived quality, 78.9% of the customers continue to state they were satisfied or very satisfied with the services provided.
Additionally, in order to obtain in-depth knowledge and improve satisfaction with the services provided, CTT periodically carries out studies and questionnaires with its customers from both the Retail Segment (customers going to CTT post offices) and the business segment (contractual customers).
The offer of training decreased by 34% compared to last year, during 103 thousand hours, due to the postponement of some measures, but we foresee a potential implementation until the end of the year. In terms of work security 510 labour accidents have occurred, 4% less compared to the same period of the previous year.
Over the 1st half of the year, the employees participated in several initiatives. Among these activities, it is important to note the blood donation campaign at the headquarters of CTT and Banco CTT in Lisbon, with the support of Instituto Português do Sangue e da Transplantação (Portuguese Blood and Transplantation Institute), which had the participation of 65 donors. In order to promote the balance between work and family, we invited the employees to participate in the Lisbon Marathon, the CTT Cup, the Médis race, the Woman's Race, the XXX National CTT Games and the visits to Kidzania and to the Zoo. Among other social and environmental initiatives, CTT sponsored the wheelchair competition in the 28th Lisbon Half Marathon, the CTT Wheelchair Racing, the "Terra dos Sonhos" (Dreamland), the "Associação Salvador" (Salvador Association), the APCL, the Fenacerci and the Iberian lynx in the Zoo. CTT were partners of the Associação Nacional Doentes Oncológicos (National Association of Oncological Patients) and donated vehicles to the Fire Brigade corporations of Bragança, Cabo Ruivo (Lisbon), Castelo Branco and Oliveira do Hospital.
This year, the wage increases were between 1.1% and 1.3% in the remuneration up to € 2,790.40. Within the scope of human resources management, CTT were distinguished for the 3rd consecutive time by the Human Resources Portugal 2017 with an award in "Gender Equality" category.
The partnership with EPIS continued to be boosted, with 15 mentors and 13 CTT trainees, with the purpose of supporting students who are under-achievers at school. Other trainees carry out a volunteer program including the support to an isolated person, duly identified by CTT, to Vitae Association and to Quercus.
CTT offset the carbon footprint of the Express & Parcels offer and of the "Green" Mail eco range, which represents about 12% of the company's total revenue. Two winning projects were chosen that CTT is going to finance to offset the carbon footprint of "Green" Mail, through a public voting participatory process launched on CTT's website and which reached more than half a million people in the social networks. Consequently, the national "Criar Bosques" (To Plant Woods) project and the international "Utilização de Biomassa Renovável" (Use of Renewable Biomass) project, in Brazil were elected, with environmental and social benefits.
The DM Eco product continued to increase its relative weight in the total Direct Mail range, in spite of a decrease in volumes and respective revenues. DM Eco currently represents 39% of total direct mail volumes. The "Green" Mail eco range also reports a decrease in volumes and revenues. Concerning acquisition, the weight of the ecological purchase reached 99.4% of the total.
There was an increase in electricity (+5.3%) and fuel (+1.5%) consumption for the entire CTT Group, essentially associated to the banking business, as well as express activity. The use of 100% of green electricity for the entire CTT Group, since 2015, has permitted the reduction of scope 1 and 2 emissions by about 17 ktons of CO2 per year. Notwithstanding, CO2 emissions of scope 1 and 2 surged 1.5%, associated to the increase in fuel consumption.
Twenty-four Ligier electric tricycles acquired at the end of 2017 began operations. These will contribute towards an annual reduction of about 0.2 tons of CO2 emissions.
Sixty-five thousand trees were planted, corresponding to the sales of last year of "Uma Árvore pela Floresta" (A Tree for the Forest), a CTT/Quercus project to plant woods more resistant to fire. The intervention areas covered Serras do Gerês, Alvão, Montemuro and Estrela, and were attended by hundreds of volunteers.
A special note is made to the Drivers' Challenge project, which was selected by the "Agência Portuguesa do Ambiente" (Portuguese Environment Agency) as one of the national representatives in the EBAE 2018 - European Business Awards for the Environment. This year, CTT won its 5th international edition, standing out as the most efficient operator in the use of fuels and in the reduction of emissions of CO2.
Throughout the semester, CTT spent 6.5 days in external meetings with investors, 3 of which in 3 conferences (organised by 3 different brokers in 3 different cities) and 3.5 days in 4 roadshows (organised by 2 different brokers in 4 different cities). The CEO of the Company spent 1 day on these activities and the CFO spent 2.5 days for the same purpose. The CEO of Banco CTT also participated on a roadshow for 1 day. Over the period, the Company met with 87 investors.
As at 30 June 2018, coverage of CTT shares was provided by 9research analysts from 4Portuguese brokers (Caixa BI, CaixaBank BPI, Haitong, and Intermoney Valores), 2 from North America (Goldman Sachs and Jefferies), 2 from Spain (BBVA, and Santander) and 1 from the United Kingdom (Barclays).
The revision of the risk profile of CTT is based on a dynamic and permanent process of collection of inputs from internal and external sources, allowing a current overview of the events that, in case they occur in a given context, may adversely affect the attainment of the strategy goals of the company.
The risk profile of CTT has currently 63 risks mapped, of which 21 are considered relevant due to the fact that they have a high probability of occurring and/or have a high impact in case they occur.
Out of the set of relevant risks, 12 priority risks are considered, on which the effort to implement specific mitigation measures has occurred:
| Strategic Risks derive from uncertainties arising from the strategy defined by CTT and the way how it is implemented |
||
|---|---|---|
| Competition | The risk derives from the lack of capacity and agility of response to competing offers and corresponding loss of customers. |
|
| Iberian CEP (Courier, Express and | The risk derives from the challenge of attracting a market share in the Iberian CEP in an | |
| Parcels) challenge | incremental and increasing manner. | |
Other strategic risks considered relevant are being monitored, namely: • Public image
• Operational Transformation Plan
| Operational Risks derive from failures or defects in the management of the business processes, in people and in IT |
||
|---|---|---|
| Operational efficacy | The risk derives from the deterioration of the quality of the service provided to the customer arising from operational, recurring or one offinefficacy (or inefficiency). |
|
| Continuity of the postal operation | The risk derives from the occurrence of disruptive, unpredictable and unavoidable events, beyond the will and control of CTT, which ultimately may lead to the interruption of the postal operations. |
|
| Security of information | The risk arises from the commitment to the confidentiality and/or integrity of the information that may result from deliberate or unintentional behavioural failures of CTT employees or third parties, as well as from unauthorized access to installations or from cyber attacks. |
Other operational risks considered relevant are being monitored, namely:
• Labour disputes
• General Data Protection Regulation (GDPR)
| Financial Risks | derive from exogenous and internal factors, which significantly and directly affect the performance and financial condition of CTT |
|---|---|
| Operational investment | The risk derives from the fact that the operational investment projects may have profitability lower than the initial forecast or even negative. |
| Financial investment | The risk derives from the total or partial loss of the capital invested by CTT in (a) participated company(ies). |
| External Risks | derive from more or less unpredictable factors that are beyond the power of intervention and influence of CTT |
|---|---|
| E-substitution | The risk derives from the decrease of postal volumes due to the intensification of the phenomenon of digitalisation and substitution of physical mail by other forms of digital communication. |
Additionally, regarding these risks some KRI (Key Risk Indicators) have been developed and some risk appetite policies and the respective tolerance levels were defined to allow to monitor and follow-up the evolution of the exposure level of CTT to each one of them.
The Board of Directors, in coordination with the persons responsible for the entire organisational structure, shall ensure the effectiveness of the internal control and risk management systems of CTT Group, ensuring the existence of a control culture based on the definition, implementation and periodic review of the risk management model.
In this sense, the governance model of the CTT Group incorporates an adequate, robust and effective internal control system to mitigate the risks to which the organisation is subject and to enable that the established goals be achieved, namely through:
The risk management system is supported by a set of standards and procedures and all relevant risks are assessed for their probability and impact, which determines the definition of mitigation strategies, in order to avoid, reduce, share and/or accept a certain level of risk.
The process of identifying and responding to risk events is ensured by the following bodies:
The internal control system acts as a management tool at all levels of the organisation and includes the following components:
On 24 July 2018, through its subsidiary Banco CTT, S.A., CTT entered into an agreement for the acquisition of 321 Crédito, Instituição Financeira de Crédito, S.A., a fast-growing specialised consumer credit business, focused on lending for the purchase of used cars by retail clients through a wide network of car dealers, for the amount of €100m to be paid in cash at completion.
The final price is subject to a post-completion price adjustment mechanism to reflect variations in the regulatory capital of 321 Crédito from 31 December 2017 onwards.
The completion of the transaction is subject to the satisfaction of a set of conditions precedent, including inter alia the customary approvals from the competition and regulatory authorities.
Following the Draft Decision approved on 11 January 2018, on 18 July 2018, ANACOM communicated the final decision on the quality of service criteria applicable to the provision of the universal postal service for 2019 and 2020. Compared to the Draft decision, the 24 quality of service indicators are maintained, but the reliability targets for the routeing times of ordinary mail, bulk mail, ordinary parcels, and newspapers and periodicals released at greater than weekly intervals were revised downwards and set at 99.7%, instead of the 99.9% laid down in the Draft Decision. Contrary to what was proposed in the Draft Decision, the new indicators shall not apply from 01 July 2018, but rather from 01 January 2019 onwards.
The new set of indicators, which compare with the previous 11 indicators, as well as the set-up of much more demanding objectives for some of them, shows that they go well beyond the current European practices and trends in this field.
Following the commitments made by CTT regarding the access to the postal network, as detailed in the chapter on the postal regulatory framework, on 05 July 2018 the AdC (Authority for the Competition) to close the proceedings against CTT and accept the proposed commitments, which will be implemented within six months from the date of the notification.
Pursuant to article 246(1)(c) of the PortugueseSecurities Code, the members of the Board of Directors of CTT – Correios de Portugal, S.A. ("CTT") identified below hereby state that, to the best of their knowledge, the interim condensed consolidated accounts relative to the first half of 2018 were prepared in accordance with the applicable accounting rules, providing a true and appropriate reflection of the assets and liabilities, the financial situation and the results of CTT and the companies included in its consolidation perimeter, and that the interim report faithfully presents the important events which occurred in the first half of 2018 and their impact on the interim condensed consolidated accounts, as well as the main risks and uncertainties for the second half of this year.
Lisbon, 31 July 2018
The Board of Directors
António Sarmento Gomes Mota Non-Executive Chairman of the Board of Directors
Francisco José Queiroz de Barros de Lacerda Chief Executive Officer (CEO) and Vice-Chairman of the Board of Directors
Dionizia Maria Ribeiro Farinha Ferreira Member of the Board of Directors and of the Executive Committee
Nuno de Carvalho Fernandes Thomaz Non-Executive Member of the Board of Directors and of the Audit Committee
José Manuel Baptista Fino Non-Executive Member of the Board of Directors
Céline Dora Judith Abecassis-Moedas Non-Executive Member of the Board of Directors
António Pedro Ferreira Vaz da Silva Member of the Board of Directors and of the Executive Committee
Francisco Maria da Costa de Sousa de Macedo Simão Member of the Board of Directors and of the Executive Committee
João Afonso Ramalho Sopas Pereira Bento Non-Executive Member of the Board of Directors
Maria Luísa Coutinho Ferreira Leite de Castro Anacoreta Correia Non-Executive Member of the Board of Directors and Chairman of the Audit Committee
Maria Belén Amatriain Corbi Non-Executive Member of the Board of Directors and of the Audit Committee
Rafael Caldeira de Castel-Branco Valverde Non-Executive Member of the Board of Directors
Guy Patrick Guimarães de Goyri Pacheco Member of the Board of Directors and of the Executive Committee (CFO)
| Board of Directors | |
|---|---|
| Chairman: | António Sarmento Gomes Mota |
| Vice-Chairman: | Francisco José Queiroz de Barros de Lacerda (CEO) |
| Members: | Dionizia Maria Ribeiro Farinha Ferreira |
| Nuno de Carvalho Fernandes Thomaz (Member of the Audit Committee) | |
| José Manuel Baptista Fino | |
| Céline Dora Judith Abecassis-Moedas | |
| António Pedro Ferreira Vaz da Silva Francisco Maria da Costa de Sousa de Macedo Simão |
|
| João Afonso Ramalho Sopas Pereira Bento | |
| Maria Luísa Coutinho Ferreira Leite de Castro Anacoreta Correia (Chairwoman | |
| of the Audit Committee) | |
| Maria Belén Amatriain Corbi (Member of the Audit Committee) | |
| Rafael Caldeira de Castel-Branco Valverde | |
| Guy Patrick Guimarães de Goyri Pacheco (CFO)10 |
| Chairman: | Júlio de Lemos de Castro Caldas |
|---|---|
| Vice-Chairman: | Francisco Maria de Moraes Sarmento Ramalho |
| Chairman: | João Luís Ramalho de Carvalho Talone |
|---|---|
| Members: | Rui Manuel Meireles dos Anjos Alpalhão Manuel Fernando Macedo Alves Monteiro |
9 As at the date of approval of this Interim Management Report.
10 Co-opted by deliberation of the Board of Directors of 19 December 2017 for the position of Member of the Board of Directors and Executive Committee (Chief Financial Officer (CFO)). Co-optation ratified by deliberation of the Annual General Meeting of 18 April 2018.
| Executive Committee | |
|---|---|
| Chairman: | Francisco José Queiroz de Barros de Lacerda (CEO) |
| Members: | Dionizia Maria Ribeiro Farinha Ferreira António Pedro Ferreira Vaz da Silva Francisco Maria da Costa de Sousa de Macedo Simão Guy Patrick Guimarães de Goyri Pacheco (CFO) |
| Audit Committee | |
| Chairwoman: | Maria Luísa Coutinho Ferreira Leite de Castro Anacoreta Correia |
| Members: | Nuno de Carvalho Fernandes Thomaz Maria Belén Amatriain Corbi |
| 11 Statutory Auditor |
|
| Statutory Auditor: | KPMG & Associados, SROC, S.A., represented by Paulo Alexandre Martins Quintas Paixão |
| Alternate Statutory Auditor: |
Vítor Manuel da Cunha Ribeirinho |
| Corporate Governance, Evaluation and Nominating Committee | |
| Chairman: | António SarmentoGomes Mota |
| Members: | José Manuel Baptista Fino Céline Dora Judith Abecassis-Moedas João Afonso Ramalho Sopas Pereira Bento Rafael Caldeira de Castel-Branco Valverde |
| Committee for the Monitoring of the Implementation of the Operational Transformation Plan | |
| Chairman: | António Sarmento Gomes Mota |
| Members: | João Afonso Ramalho Sopas Pereira Bento Maria Luísa Coutinho Ferreira Leite de Castro Anacoreta Correia Rafael Caldeira de Castel-Branco Valverde |
11 Re-elected for the 2018-2020 term of office at the Annual General Meeting of 18 April 2018.
In the 1st half of 2018, the share capital of CTT, amounting to €75,000,000, was fully subscribed and paidup, represented by 150,000,000 ordinary shares with a nominal value of €0.50 each. These shares are registered and in book-entry form having no different categories. All shares representing the capital of the Company are admitted to trading on the regulated market Euronext Lisbon.
As at 30 June 2018, CTT shareholder structure in terms of qualifying holdings was as follows:
At the end of the 1st half of 2018, based on the communications made to the Company, the qualifying holdings in CTT, as calculated in accordance with the provisions of article 20 of the Portuguese Securities Code, were as follows:
| Shareholders | No. of shares | % Share capital | % Voting rights | |
|---|---|---|---|---|
| Gestmin SGPS, S.A. (1) | 18,589,534 | 12.393% | 12.393% | |
| Manuel Carlos de Melo Champalimaud | 284,885 | 0.190% | 0.190% | |
| Manuel Carlos de Melo Champalimaud (2) | Total | 18,874,419 | 12.583% | 12.583% |
| Global Portfolio Investments, S.L. (3) | 8,492,745 | 5.662% | 5.662% | |
| Indumenta Pueri, S.L. (3) | Total | 8,492,745 | 5.662% | 5.662% |
| Norges Bank | Total | 6,399,190 | 4.266% | 4.266% |
| Credit Suisse Group AG (4) | Total | 4,965,530 | 3.310% | 3.310% |
| BlackRock, Inc.(5) | Total | 3,880,684 | 2.587% | 2.587% |
| BBVA BOLSA FI (6) | 1,139,308 | 0.760% | 0.760% | |
| BBVA BOLSA EURO FI (6) | 674,991 | 0.450% | 0.450% | |
| BBVA BOLSA EUROPA FI (6) | 1,335,028 | 0.890% | 0.890% | |
| BBVA BOLSA PLUS FI (6) | 346,172 | 0.231% | 0.231% | |
| BBVA Asset Management, SA SGIIC (6) | Total | 3,495,499 | 2.330% | 2.330% |
| GreenWood Builders Fund I, LP (7) | Total | 3,478,370 | 2.319% | 2.319% |
| Wellington Management Group LLP(8) | Total | 3,105,222 | 2.070% | 2.070% |
| CTT, S.A. (own shares)(9) | Total | 1 | 0.000% | 0.000% |
| Other shareholders | Total | 97,308,340 | 64.872% | 64.872% |
| TOTAL | 150,000,000 | 100.000% | 100.000% |
(1) Includes 18,465,215 shares directly held by Gestmin SGPS, S.A. and 124,319 shares held by members of its Board of Directors.
(2)Qualifying shareholding directly and indirectly attributable to Manuel Carlos de Melo Champalimaud.
(3)Global Portfolio Investments, S.L. is controlled by Indumenta Pueri, S.L..
(4) The full chain of Credit Suisse Group AG controlled undertakings through which the voting rights and/or the financial instruments are effectively held is shown as attachment to the qualifying holdings press release of 21 November 2017 available on CTT website at: http://www.ctt.pt/contentAsset/raw-data/68124fa8-3e13-4051-a36c-
4cabc2009f96/ficheiroPdf/Credit%20Suisse%2021Nov2017\_EN.pdf?byInode=true.
(5) The full chain of undertakings controlled by BlackRock, Inc. through which the voting rights and/or the financial instruments are effectively held is shown as attachment to the qualifying holdings press release of 27 June 2018 available on CTT website at: http://www.ctt.pt/contentAsset/raw-data/15411667-923b-486a-96c9-01098bdaffe5/ficheiroPdf/BlackRock%2027June2018\_EN.pdf?byInode=true.
(6)Investment funds managed by BBVA Asset Management, SA, SGIIC, entity directly controlled by Cidessa Uno, SL, as per point 10 of the qualifying holdings press release of 26 March 2018 available on CTT website at: http://www.ctt.pt/contentAsset/raw-data/a241575b-7dcb-47ff-8374-d5dc44f2bd56/ficheiroPdf/BBVA%20Qualif%20Hold%2026Mar2018\_EN.pdf?byInode=true.
(7)Fund managed by GreenWood Investors LLC.
(8) The full chain of controlled undertakings controlled by the Wellington Management Group LLP through which the voting rights are held is shown in point 8 of the qualifying holdings press release of 5 September 2017 available on CTT website at: http://www.ctt.pt/contentAsset/rawdata/19f0d587-5a8b-4e33-8afd-ba914e4d88cd/ficheiroPdf/Wellington%20Managt%20Gr%20Qualif%20Hold%205Sep2017\_EN.pdf?byInode=true.
(9) See point 4 below.
Updated information on qualifying holdings in the Company as at the date of approval of this report can be found at www.ctt.pt and the Portuguese Securities Commission (CMVM) website, www.cmvm.pt.
At the present date, CTT holds 1 own share with the nominal value of €0.50 corresponding to 0.000% of the share capital, the inherent voting rights being suspended as prescribed in article 324(1)(a) of the Portuguese Companies Code ("PCC").
On 18 April 2018 the Annual General Meeting ("AGM") of CTT was held, during which KPMG & Associados – Sociedade de Revisores Oficiais de Contas, S.A. was elected as the Statutory Auditor of the Company for the 2018/2020 three-year period. It is represented by Paulo Alexandre Martins Quintas Paixão as effective Chartered Accountant and Vítor Manuel da Cunha Ribeirinho as alternate Chartered Accountant. The AGM also ratified the cooptation of Guy Patrick Guimarães de Goyri Pacheco as Member of the Board of Directors and of the Executive Committee (CFO) of CTT to complete the 2017/2019 term of office.
The tables below show the number of shares held by the members of the managing and supervisory bodies of CTT as well as by the entities closely related to them, including when applicable all the acquisitions, encumbrances or disposals of said shares carried out during the 1st half of 2018, based on the communications made to the Company, pursuant to the terms of article 447(5)of the Portuguese Companies Code and article 14 of CMVM Regulation no. 5/2008.
| Board of Directors (a) | No. of shares as at 31.12.2017 |
Date Acquisition | Encum brance |
Disposal | Price | No. of shares as at 30.06.2018 |
|---|---|---|---|---|---|---|
| António Sarmento Gomes Mota | 0 | 0 | ||||
| Francisco José Queiroz de Barros de Lacerda | 67,982 | 67,982 | ||||
| Dionizia Maria Ribeiro Farinha Ferreira | 48,828 | 48,828 | ||||
| António Pedro Ferreira Vaz da Silva | 0 | 0 | ||||
| Francisco Maria da Costa de Sousa Macedo Simão | 0 | 0 | ||||
| Nuno de Carvalho Fernandes Thomaz | 0 | 0 | ||||
| José Manuel Baptista Fino | 0 | 0 | ||||
| Céline Dora Judith Abecassis-Moedas | 0 | 0 | ||||
| João Afonso Ramalho Sopas Pereira Bento | 13,550 | 13,550 | ||||
| Mª Luísa Coutinho F. L. de Castro Anacoreta Correia | 0 | 0 | ||||
| Maria Belén Amatriain Corbi | 0 | 0 | ||||
| Rafael Caldeira de Castel-Branco Valverde | 0 | 0 | ||||
| Guy Patrick Guimarães de Goyri Pacheco | 0 | 0 |
(a) Includes the members of the Executive Committee and those of the Audit Committee.
| Closely Related Parties | No. of shares as at 31.12.2017 |
Date | Acquisition | Encum brance |
Disposal | Price | No. of shares as at 30.06.2018 |
|---|---|---|---|---|---|---|---|
| Gestmin SGPS, S.A.(b) | 16,642,862 | Annex | Annex | Annex | 18,465,215 | ||
(b) Entity closely related to João Afonso Ramalho Sopas Pereira Bento, Vice-Chairman of the Board of Directors of Gestmin SGPS, S.A.. The details of the transactions are included in Annex of this Report.
| Statutory Auditor and External Auditor | No. of shares as at 31.12.2017 |
Date | Acquisition | Encum brance |
Disposa l |
Price | No. of shares as at 30.06.2018 |
|---|---|---|---|---|---|---|---|
| KPMG & Associados, SROC, S.A. | 0 | 0 | |||||
| Paulo Alexandre Martins Quintas Paixão | 0 | 0 | |||||
| Vítor Manuel da Cunha Ribeirinho | 0 | 0 |
Other than those indicated above, as at 30 June 2018, the members of the managing and supervisory bodies of CTT did not hold any securities issued by the Company or by companies in a group or control relationship with CTT, or have they performed any other transactions in respect of such securities during the 1st half of 2018, pursuant to article 447 of the PCC.
In accordance with the internal control procedures implemented pursuant to the Regulation on Assessment and Control Transactions with Related Parties and Prevention of Situations of Conflict of interest ("Regulation on Related Parties") which is available on www.ctt.pt, it is up to the Audit Committee to internally develop, among others, the control procedures in respect of transactions with related parties with a view to strengthening the mechanisms of prevention, identification and resolution of situations of conflict of interest and thus increase the degree of transparency and objectivity in the management of this type of operations.
In terms of internal functioning, it is up to the Executive Committee of CTT to submit to the Audit Committee for analysis and then to the Board of Directors for authorization, the terms and conditions of transactions to be contracted by CTT with related parties, which include qualified Shareholders, directors and third parties related to anyof these through relevant commercial or personal interests (pursuant to the terms in IAS 24) and also subsidiaries, associated companies and joint ventures.
Pursuant to the aforementioned internal control procedures implemented, and for the purposes of point e) of paragraph 5 of article 66 and of article 397 of the Companies Code, by resolution of the Board of Directors of May 24, 2018, the hiring of the Law Company Uría Menéndez-Proença de Carvalho, related party of CTT Administrator Maria Luisa Coutinho Ferreira Leite de Castro Anacoreta Correia, has been authorised, for the provision of legal advisory services to Banco CTT.
With the exception of the business arrangement mentioned in the preceding paragraph, no other business has been conducted between CTT and its Administrators, whether directly or through an intermediary.
For the purposes of reporting as provided for in article 398 of the Companies Code, none of the Administrators of CTT have exercised, during the first half of 2018, in the Company or in companies related to it through a relationship of control or group, any temporary or permanent positions under an employment contract, whether subordinate or autonomous.
The list below indicates the internal and external positions held by members of the management and supervisory bodies at the Company on the date of approval of this Interim Management Report:
| Members of the Board of Directors |
Internal Appointments | External Appointments |
|---|---|---|
| António Sarmento Gomes Mota |
• Non-Executive Chairman of the Board of Directors of CTT • Chairman of the Corporate Governance, Evaluation and Nominating Committee of CTT • Chairman of the Selection Committee of Banco CTT, S.A. • Member of the Remuneration Committee of Banco CTT, S.A. (elected at the General Meeting) |
• Member of the Remuneration Committee of PHAROL, SGPS, S.A. • Vice-Chairman of the Portuguese Institute of Corporate Governance and Chairman of same |
| Members of the Board of Directors |
Internal Appointments | External Appointments |
|---|---|---|
| • Chairman of the Committee for the Monitoring of the Implementation of the Operational Transformation Plan of CTT |
||
| Francisco José Queiroz de Barros de Lacerda |
• Chief Executive Officer (CEO) of CTT and Vice-Chairman of the Board of Directors • Non-Executive Chairman of the Board of Directors of Banco CTT, S.A. • Chairman of the Board of CTT Expresso – Serviços Postais e Logística, S.A. • Chairman of the Board and of the Executive Committee of Tourline Express Mensajería, S.L.U. • Chairman of the Remuneration Committee (elected at the General Meeting) of Banco CTT, S.A. • Chairman of the Compensation Committee (within the Board of Directors) • Member of the Selection Committee of Banco CTT, S.A. • Chairman of the Board of the General Meeting of Correio Expresso de Moçambique, S.A. |
• Non-Executive Member of the Board of Directors and of the Audit & Compliance Committee and the Nominating & Remunerations Committee ofEndesa Energia, S.A. • Member of the Board of COTEC Portugal - Associação Empresarial para a Inovação • Member of the Board of Directors of Fundação Portuguesa das Comunicações (former General Council) • Member of the Remuneration Committee of PHAROL, SGPS, S.A. • Member of the Supervisory Board of the Cascais Yacht Club (Deputy Commodore) |
| Dionizia Maria Ribeiro Farinha Ferreira |
• Member of the Board of Directors and of the Executive Committee of CTT • Chairwoman of the Board of Directors of Transporta – Transportes Porta a Porta, S.A. • Chairwoman of the Board of Directors of CTT Contacto, S.A. • Chairwoman of the Board of Directors of Mailtec Comunicação, S.A. • Member of the Boards of Directors of CTT Expresso – Serviços Postais e Logística, S.A. • Member of the Boards of Directors and of the Executive Committee of Tourline Express Mensajería, S.L.U. • Member of the Board of Directors of Correio Expresso de Moçambique, S.A. |
| Members of the Board of Directors |
Internal Appointments | External Appointments |
|---|---|---|
| • Non-Executive Member of the Board of Directors of CTT |
• Chairman of the Fiscal Board of Sagasta Finance, STC, S.A. |
|
| • Member of the Audit Committee of CTT • Chairman of the Ethics Committee of CTT |
• Manager of I Cook -Organização de Eventos, Lda. |
|
| • Member of the Advisory Board of Luz Saúde, S.A. |
||
| Nuno de Carvalho Fernandes Thomaz |
• Member of the General Board of the Portuguese Institute of Corporate Governance on behalf of CTT |
|
| • Chairman ofthe School Council ofNova School of Business and Economics |
||
| • Vice-Chairman of the Forum para a Competitividade |
||
| • Non-Executive Member of the Board of Directors of CTT |
• Chairman of the Board of Directors of Ramada Energias Renováveis, S.A. |
|
| José Manuel Baptista Fino |
• Member of the Corporate Governance, Evaluation and Nominating Committee of CTT |
• Non-Executive Member of the Board of Directors of SDC – Investimentos, SGPS, S.A. |
| • Member of the Selection Committee of Banco CTT, S.A. |
• Sole Director of Dignatis - Investimentos Imobiliários e Turísticos, SGPS, S.A. |
|
| • Chairman of the Board of Directors of Ramada Holdings SGPS, S.A. |
||
| • Managing Partner of Nova Algodoeira, Lda. |
||
| • Sole Director of Dorfino Imobiliário, S.A. | ||
| • Non-Executive Member of the Board of Directors of Speciality Minerals (Portugal) Especialidades Minerais, S.A. |
||
| • Non-Executive Member of the Board of Directors of CTT |
• Non-Executive Member of the Board of Directors of José de Mello Saúde, S.A. |
|
| • Member of the Corporate Governance, Evaluation and Nominating Committee of CTT |
• Member of the Audit Committee of Europac (Papeles y Cartones de Europa, S.A.) |
|
| Céline Dora Judith Abecassis-Moedas |
• Lead Independent Director and Chairwoman of the Nominations and Remuneration Committee of Europac (Papeles y Cartones de Europa, S.A.) |
|
| • Non-Executive Member of the Board of Directors of Europac (Papeles y Cartones de Europa, S.A.) |
||
| • Member of the Advisory Board of COTEC Portugal –Associação Empresarial para a Inovação |
||
| • Chairwoman of the Innovation Strategic Council of VdA Vieira de Almeida |
| Members of the Board of Directors |
Internal Appointments | External Appointments |
|---|---|---|
| António Pedro Ferreira Vaz da Silva |
• Member of the Board of Directors and of the Executive Committee of CTT • Member of the Board of Directors of CTT Expresso – Serviços Postais e Logística, S.A. • Non-Executive Member of the Board of Directors of Banco CTT, S.A. • Member of the Board of Directors of Payshop (Portugal), S.A. |
|
| Francisco Maria da Costa de Sousa de Macedo Simão |
• Member of the Board of Directors and of the Executive Committee of CTT • Member of the Board of Directors of CTT Expresso – Serviços Postais e Logística, S.A. • Chairman of the Board of Directors of Escrita Inteligente, S.A. • Member of the Board of Directors of CTT Contacto, S.A. • Member of the Board of Directors of Mailtec Comunicação, S.A. • Member of the Board of Directors of Transporta – Transportes Porta a Porta, S.A. |
• Non-Executive Member of the Board of Directors of Almonda S.A. |
| João Afonso Ramalho Sopas Pereira Bento |
• Non-Executive Member of the Board of Directors of CTT • Member of the Corporate Governance, Evaluation and Nominating Committee of CTT • Member of the Committee for the Monitoring of the Implementation of the Operational Transformation Plan of CTT |
• Manager of Gestmin Serviços, Unipessoal, Lda. • Chairman of the Board of Directors of OZ Energia, S.A. • Vice-Chairman of the Board of Directors and Chief Executive Officer (CEO) of Gestmin, SGPS, S.A. • Member of the Innovation Strategic Council of VdA Vieira de Almeida • Member of the General Council of the Portuguese Institute of Corporate Governance • Chairman of the Quinta do Peru Golf Club • Member of the Advisory Board of ANI – Agência Nacional de Inovação • Permanent Member of the Advisory Board of AICEP –Agência para o Investimento e Comércio Externo de Portugal • Vice-Chairman of the Engineering Academy • Honorary President of ASECAP – Association of the European Tolled Motorways |
| Members of the Board of Directors |
Internal Appointments | External Appointments |
|---|---|---|
| • Non-Executive Member of the Board of Directors of CTT |
• Member of the Management Board of Ordem dos Revisores Oficiais de Contas |
|
| • Chairwoman of the Audit Committee of CTT |
• Chairwoman of the Fiscal Board of Centro Hospitalar S.João, EPE |
|
| • Member of the Committee for the Monitoring of the Implementation of the Operational Transformation Plan of CTT |
• Non-Executive Member of the Board of Directors of Sonaegest-Sociedade Gestora de Fundos de Investimento, S.A. |
|
| Maria Luísa Coutinho | • Chairwoman of the Fiscal Board of Sogrape, SGPS, S.A. |
|
| Ferreira Leite de Castro Anacoreta Correia |
• Partner of Novais, Anacoreta & Associado, SROC |
|
| • Non-Executive Member of the Board of Directors and of the Audit Committee of Impresa, S.A. |
||
| • Member of the Scientific Board of the Portuguese Tax Association |
||
| • Arbitrator in tax-related matters of CAAD –Administrative Arbitration Board |
||
| • Non-Executive Member of the Board of Directors of CTT |
• Non-Executive Member of the Board of Directors of Faes Farma, S.A. |
|
| • Member of the Audit Committee of CTT | • Non-Executive Member of the Board of Directors and Chairwoman of the Audit Committee of PRIM, S.A. |
|
| Maria Belén Amatriain Corbi | • Non-Executive Member of the Board of Directors and Member of the Appointments and Remuneration Committee of Euskaltel |
|
| • Non-Executive Member of the Board of Directors, Member of the Audit & Compliance Committee and Risk Committee and President of the Appointments and Remuneration Commission of Banco Evo (Banking services, Spain) |
||
| • Non-Executive Member of the Board of Directors and Member of the Appointments and Remuneration Committee of IC-A Instituto de Consejeros-Administradores |
| Members of the Board of Directors |
Internal Appointments | External Appointments |
|---|---|---|
| Rafael Caldeira de Castel Branco Valverde |
• Non-Executive Member of the Board of Directors of CTT • Member of the Corporate Governance, Evaluation and Nominating Committee of CTT • Member of the Remuneration Committee (elected at the General Meeting) of Banco CTT, S.A. • Member of the Committee for the Monitoring of the Implementation of the Operational Transformation Plan of CTT |
• Vice-Chairman (Non-executive) of the Board of Directors of Banco Caixa Geral – Brasil, S.A. |
| Guy Patrick Guimarães de Goyri Pacheco |
• Member of the Board of Directors and Chief Financial Officer (CFO) of CTT • Non-Executive Member of the Board of Directors of Banco CTT, S.A. • Member of the Board of Directors of CTT Expresso – Serviços Postais e Logística, S.A. • Non-Executive Member of the Board of Directors of Tourline Express Mensajería, S.L.U. |
• Member of the Board of Directors of New Finerge, S.A. • Member of the Board of Directors of Âncora Wind – Energia Eólica, S.A. • Member of the Board of Directors of First State Wind Energy Investments, S.A. • Member of the Board of AEM Associação de Empresas Emitentes de Valores Cotados em Mercado (Portuguese Issuers Association) |
Detail of the transactions of CTT shares carried out by Gestmin SGPS, S.A., entity closely related to the Non-Executive Member of the Board of Directors of CTT, João Afonso Sopas Ramalho Pereira Bento, during the 1st half of 2018, according to the communications sent to the Company:
| Type of transaction |
Venue | Price (€) |
Volume | Date of the transaction |
|---|---|---|---|---|
| Purchase | XLIS | 3.570 | 5,000 02-01-2018 | |
| Purchase | XLIS | 3.590 | 12,500 02-01-2018 | |
| Purchase | XLIS | 3.594 | 7,500 02-01-2018 | |
| Purchase | XLIS | 3.600 | 7,500 02-01-2018 | |
| Purchase | XLIS | 3.610 | 7,500 02-01-2018 | |
| Purchase | XLIS | 3.614 | 1,250 02-01-2018 | |
| Purchase | XLIS | 3.618 | 5,000 02-01-2018 | |
| Purchase | XLIS | 3.620 | 10,000 02-01-2018 | |
| Purchase | XLIS | 3.626 | 5,000 02-01-2018 | |
| Purchase | XLIS | 3.630 | 5,000 02-01-2018 | |
| Purchase | XLIS | 3.636 | 8,500 02-01-2018 | |
| Purchase | XLIS | 3.650 | 2,700 03-01-2018 | |
| Purchase | XLIS | 3.672 | 1,400 03-01-2018 | |
| Purchase | XLIS | 3.678 | 5,000 03-01-2018 | |
| Purchase | XLIS | 3.680 | 10,000 03-01-2018 | |
| Purchase | XLIS | 3.684 | 5,000 03-01-2018 | |
| Purchase | XLIS | 3.690 | 10,000 03-01-2018 | |
| Purchase | XLIS | 3.694 | 10,000 03-01-2018 | |
| Purchase | XLIS | 3.698 | 5,300 03-01-2018 | |
| Purchase | XLIS | 3.700 | 20,000 03-01-2018 | |
| Purchase | XLIS | 3.702 | 5,000 03-01-2018 | |
| Purchase | XLIS | 3.704 | 5,000 03-01-2018 | |
| Purchase | XLIS | 3.712 | 10,000 03-01-2018 | |
| Purchase | XLIS | 3.714 | 10,000 03-01-2018 | |
| Purchase | XLIS | 3.718 | 15,000 03-01-2018 | |
| Purchase | XLIS | 3.720 | 3,600 03-01-2018 | |
| Purchase | XLIS | 3.722 | 10,000 03-01-2018 | |
| Purchase | XLIS | 3.726 | 5,000 03-01-2018 | |
| Purchase | XLIS | 3.730 | 5,000 03-01-2018 | |
| Purchase | XLIS | 3.732 | 5,000 03-01-2018 | |
| Purchase | XLIS | 3.740 | 12,000 03-01-2018 | |
| Purchase | XLIS | 3.744 | 5,000 03-01-2018 | |
| Purchase | XLIS | 3.750 | 10,000 03-01-2018 | |
| Purchase | XLIS | 3.668 | 5,000 04-01-2018 | |
| Purchase | XLIS | 3.670 | 12,000 04-01-2018 | |
| Purchase | XLIS | 3.680 | 5,000 04-01-2018 | |
| Purchase | XLIS | 3.682 | 5,000 04-01-2018 | |
| Purchase | XLIS | 3.684 | 1,000 04-01-2018 | |
| Purchase | XLIS | 3.686 | 10,000 04-01-2018 | |
| Purchase | XLIS | 3.690 | 32,500 04-01-2018 | |
| Purchase | XLIS | 3.694 | 10,000 04-01-2018 | |
| Purchase | XLIS | 3.698 | 4,601 04-01-2018 | |
| Purchase | XLIS | 3.700 | 10,399 04-01-2018 | |
| Purchase | XLIS | 3.706 | 5,000 04-01-2018 | |
| Purchase | XLIS | 3.710 | 5,837 04-01-2018 | |
| Purchase | XLIS | 3.716 | 9,163 04-01-2018 | |
| Purchase | XLIS | 3.720 | 10,000 04-01-2018 | |
| Purchase | XLIS | 3.730 | 18,000 04-01-2018 | |
| Purchase | XLIS | 3.750 | 10,000 04-01-2018 | |
| Purchase | XLIS | 3.760 | 5,000 04-01-2018 | |
| Type of transaction |
Venue | Price (€) |
Volume | Date of the transaction |
|---|---|---|---|---|
| Purchase | XLIS | 3.696 | 66,000 | 05-01-2018 |
| Purchase | XLIS | 3.698 | 7,030 | 05-01-2018 |
| Purchase | XLIS | 3.700 | 15,000 | 05-01-2018 |
| Purchase | XLIS | 3.702 | 5,000 | 05-01-2018 |
| Purchase | XLIS | 3.708 | 5,000 | 05-01-2018 |
| Purchase | XLIS | 3.710 | 17,970 | 05-01-2018 |
| Purchase | XLIS | 3.720 | 10,000 | 05-01-2018 |
| Purchase | XLIS | 3.730 | 5,000 | 05-01-2018 |
| Purchase | XLIS | 3.732 | 5,000 | 05-01-2018 |
| Purchase | XLIS | 3.742 | 10,000 | 05-01-2018 |
| Purchase | XLIS | 3.744 | 5,000 | 05-01-2018 |
| Purchase | XLIS | 3.748 | 15,000 | 05-01-2018 |
| Purchase | XLIS | 3.750 | 24,000 | 05-01-2018 |
| Purchase | XLIS | 3.752 | 26,000 | 05-01-2018 |
| Purchase | XLIS | 3.756 | 10,000 | 05-01-2018 |
| Purchase | XLIS | 3.760 | 5,000 | 05-01-2018 |
| Purchase | XLIS | 3.762 | 10,000 | 05-01-2018 |
| Purchase | XLIS | 3.770 | 10,000 | 05-01-2018 |
| Purchase | XLIS | 3.790 | 10,000 | 05-01-2018 |
| Purchase | XLIS | 3.730 | 5,000 | 08-01-2018 |
| Purchase | XLIS | 3.734 | 5,133 | 08-01-2018 |
| Purchase | XLIS | 3.738 | 5,000 | 08-01-2018 |
| Purchase | XLIS | 3.748 | 14,867 | 08-01-2018 |
| Purchase | XLIS | 3.750 | 25,000 | 08-01-2018 |
| Purchase | XLIS | 3.752 | 21,891 | 08-01-2018 |
| Purchase | XLIS | 3.754 | 23,109 | 08-01-2018 |
| Purchase | XLIS | 3.756 | 10,000 | 08-01-2018 |
| Purchase | XLIS | 3.758 | 5,000 | 08-01-2018 |
| Purchase | XLIS | 3.760 | 15,000 | 08-01-2018 |
| Purchase | XLIS | 3.762 | 16,000 | 08-01-2018 |
| Purchase | XLIS | 3.764 | 10,000 | 08-01-2018 |
| Purchase | XLIS | 3.766 | 5,000 | 08-01-2018 |
| 08-01-2018 | ||||
| Purchase | XLIS | 3.770 | 5,000 | 08-01-2018 |
| Purchase | XLIS | 3.778 | 10,000 | |
| 09-01-2018 | ||||
| Purchase | XLIS XLIS |
3.784 | 7,500 | 09-01-2018 |
| Purchase | 3.786 | 6,607 | ||
| Purchase | XLIS | 3.788 | 3,958 | 09-01-2018 |
| Purchase | XLIS | 3.790 | 9,435 | 09-01-2018 |
| Purchase | XLIS | 3.792 | 6,567 | 09-01-2018 |
| Purchase | XLIS | 3.798 | 6,572 | 09-01-2018 |
| Purchase | XLIS | 3.800 | 20,000 | 09-01-2018 |
| Purchase | XLIS | 3.802 | 3,777 | 09-01-2018 |
| Purchase | XLIS | 3.808 | 5,000 | 09-01-2018 |
| Purchase | XLIS | 3.810 | 20,000 | 09-01-2018 |
| Purchase | XLIS | 3.814 | 7,403 | 09-01-2018 |
| Purchase | XLIS | 3.816 | 7,143 | 09-01-2018 |
| Purchase | XLIS | 3.818 | 750 | 09-01-2018 |
| Purchase | XLIS | 3.820 | 53,578 | 09-01-2018 |
| Purchase | MSSI | 3.820 | 1,781 | 09-01-2018 |
| Purchase | TRQX | 3.820 | 1,707 | 09-01-2018 |
| Purchase | MSSI | 3.821 | 1,829 | 09-01-2018 |
| Type of transaction |
Venue | Price (€) |
Volume | Date of the transaction |
|---|---|---|---|---|
| Purchase | XLIS | 3.822 | 8,500 | 09-01-2018 |
| Purchase | CHIX | 3.822 | 1,238 | 09-01-2018 |
| Purchase | MSSI | 3.822 | 2,648 | 09-01-2018 |
| Purchase | XLIS | 3.824 | 1,669 | 09-01-2018 |
| Purchase | BATE | 3.824 | 1,697 | 09-01-2018 |
| Purchase | CHIX | 3.824 | 1,659 | 09-01-2018 |
| Purchase | MSSI | 3.824 | 1,332 | 09-01-2018 |
| Purchase | CHID | 3.825 | 4,105 | 09-01-2018 |
| Purchase | XLIS | 3.826 | 3,292 | 09-01-2018 |
| Purchase | CHIX | 3.826 | 1,657 | 09-01-2018 |
| Purchase | MSSI | 3.826 | 2,064 | 09-01-2018 |
| Purchase | MSSI | 3.828 | 875 | 09-01-2018 |
| Purchase | MSSI | 3.829 | 763 | 09-01-2018 |
| Purchase | XLIS | 3.832 | 6,222 | 09-01-2018 |
| Purchase | CHIX | 3.832 | 1,623 | 09-01-2018 |
| Purchase | MSSI | 3.832 | 4,922 | 09-01-2018 |
| Purchase | TRQX | 3.832 | 1,670 | 09-01-2018 |
| Purchase | MSSI | 3.833 | 1,039 | 09-01-2018 |
| Purchase | MSSI | 3.834 | 891 | 09-01-2018 |
| Purchase | XLIS | 3.834 | 1,756 | 09-01-2018 |
| Purchase | MSSI | 3.834 | 1,485 | 09-01-2018 |
| Purchase | MSSI | 3.836 | 366 | 09-01-2018 |
| Purchase | BATD | 3.837 | 2,100 | 09-01-2018 |
| Purchase | XLIS | 3.840 | 1,693 | 09-01-2018 |
| Purchase | MSSI | 3.840 | 3,720 | 09-01-2018 |
| Purchase | MSSI | 3.841 | 823 | 09-01-2018 |
| Purchase | XLIS | 3.842 | 1,562 | 09-01-2018 |
| Purchase | MSSI | 3.842 | 2,195 | 09-01-2018 |
| Purchase | TRQX XLIS |
3.842 3.844 |
1,713 | 09-01-2018 09-01-2018 |
| Purchase Purchase |
MSSI | 3.845 | 1,530 193 |
09-01-2018 |
| Purchase | XLIS | 3.846 | 1,352 | 09-01-2018 |
| Purchase | MSSI | 3.846 | 850 | 09-01-2018 |
| Purchase | XLIS | 3.848 | 1,324 | 09-01-2018 |
| Purchase | XLIS | 3.850 | 8,277 | 09-01-2018 |
| Purchase | XLIS | 3.856 | 1,595 | 09-01-2018 |
| Purchase | XLIS | 3.864 | 1,728 | 09-01-2018 |
| Purchase | MSSI | 3.865 | 243 | 09-01-2018 |
| Purchase | CHIX | 3.866 | 2,440 | 09-01-2018 |
| Purchase | XLIS | 3.870 | 1,582 | 09-01-2018 |
| Purchase | XLIS | 3.774 | 5,000 10-01-2018 | |
| Purchase | XLIS | 3.780 | 15,000 10-01-2018 | |
| Purchase | XLIS | 3.784 | 2,000 10-01-2018 | |
| Purchase | XLIS | 3.786 | 15,000 10-01-2018 | |
| Purchase | XLIS | 3.788 | 5,000 10-01-2018 | |
| Purchase | XLIS | 3.790 | 5,000 10-01-2018 | |
| Purchase | XLIS | 3.792 | 12,500 10-01-2018 | |
| Purchase | XLIS | 3.800 | 6,715 10-01-2018 | |
| Purchase | XLIS | 3.802 | 5,000 10-01-2018 | |
| Purchase | XLIS | 3.806 | 5,000 10-01-2018 | |
| Purchase | XLIS | 3.808 | 709 10-01-2018 | |
| Purchase | XLIS | 3.810 | 14,291 10-01-2018 | |
| Purchase | XLIS | 3.818 | 5,000 10-01-2018 | |
| Purchase | XLIS | 3.820 | 7,747 10-01-2018 | |
| Purchase | XLIS | 3.822 | 10,533 10-01-2018 | |
| Purchase | XLIS | 3.826 | 6,752 10-01-2018 | |
| Purchase | XLIS | 3.830 | 23,753 10-01-2018 | |
| Type of | Price | Date of the | ||
|---|---|---|---|---|
| transaction | Venue | (€) | Volume | transaction |
| Purchase | XLIS | 3.810 | 3,896 | 11-01-2018 |
| Purchase | XLIS | 3.816 | 2,500 | 11-01-2018 |
| Purchase | XLIS | 3.818 | 1,489 | 11-01-2018 |
| Purchase | XLIS | 3.822 | 3,000 | 11-01-2018 |
| Purchase | XLIS | 3.824 | 1,905 | 11-01-2018 |
| Purchase | XLIS | 3.828 | 10,000 | 11-01-2018 |
| Purchase | XLIS | 3.830 | 7,500 | 11-01-2018 |
| Purchase | XLIS | 3.832 | 2,956 | 11-01-2018 |
| Purchase | XLIS | 3.840 | 5,000 | 11-01-2018 |
| Purchase | XLIS | 3.844 | 1,200 | 11-01-2018 |
| Purchase | XLIS | 3.850 | 45,519 | 11-01-2018 |
| Purchase | XLIS | 3.852 | 31,552 | 11-01-2018 |
| Purchase | XLIS | 3.854 | 10,000 | 11-01-2018 |
| Purchase | XLIS | 3.856 | 12,496 | 11-01-2018 |
| Purchase | XLIS | 3.860 | 36,095 | 11-01-2018 |
| Purchase | XLIS | 3.864 | 15,000 | 11-01-2018 |
| Purchase | XLIS | 3.866 | 6,552 | 11-01-2018 |
| Purchase | XLIS | 3.874 | 5,000 | 11-01-2018 |
| Purchase | XLIS | 3.878 | 500 | 11-01-2018 |
| Purchase | XLIS | 3.880 | 4,500 | 11-01-2018 |
| Purchase | XLIS | 3.882 | 6,015 | 11-01-2018 |
| Purchase | XLIS | 3.474 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.482 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.490 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.500 | 10,000 | 12-01-2018 |
| Purchase | XLIS | 3.510 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.520 | 15,000 | 12-01-2018 |
| Purchase | XLIS | 3.550 | 10,000 | 12-01-2018 |
| Purchase | XLIS | 3.580 | 10,000 | 12-01-2018 |
| Purchase | XLIS | 3.590 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.620 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.630 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.658 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.672 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.680 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.740 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.760 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.770 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.780 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.790 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.794 | 1,400 | 12-01-2018 |
| Purchase | XLIS | 3.796 | 1,447 | 12-01-2018 |
| Purchase | XLIS | 3.798 | 4,123 | 12-01-2018 |
| Purchase | XLIS | 3.800 | 8,030 | 12-01-2018 |
| Purchase | XLIS | 3.812 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.820 | 10,000 | 12-01-2018 |
| Purchase | XLIS | 3.822 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.832 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.842 | 5,000 | 12-01-2018 |
| Purchase | XLIS | 3.850 | 3,500 | 12-01-2018 |
| Purchase | XLIS | 3.868 | 1,500 | 12-01-2018 |
| Type of transaction |
Venue | Price (€) |
Volume | Date of the transaction |
|---|---|---|---|---|
| Purchase | XLIS | 3.120 | 1,000 13-03-2018 | |
| Purchase | XLIS | 3.126 | 5,000 13-03-2018 | |
| Purchase | XLIS | 3.130 | 5,000 13-03-2018 | |
| Purchase | XLIS | 3.136 | 4,000 13-03-2018 | |
| Purchase | XLIS | 3.140 | 27,500 13-03-2018 | |
| Purchase | XLIS | 3.142 | 5,000 13-03-2018 | |
| Purchase | XLIS | 3.150 | 15,000 13-03-2018 | |
| Purchase | XLIS | 3.154 | 5,000 13-03-2018 | |
| Purchase | XLIS | 3.160 | 5,000 13-03-2018 | |
| Purchase | XLIS | 3.170 | 5,000 13-03-2018 | |
| Purchase | XLIS | 3.174 | 5,000 13-03-2018 | |
| Purchase | XLIS | 3.176 | 5,000 13-03-2018 | |
| Purchase | XLIS | 3.180 | 5,000 13-03-2018 | |
| Purchase | XLIS | 3.184 | 10,000 13-03-2018 | |
| Purchase | XLIS | 3.190 | 10,000 13-03-2018 | |
| Purchase | XLIS | 3.194 | 5,000 13-03-2018 | |
| Purchase | XLIS | 3.196 | 1,037 13-03-2018 | |
| Purchase | XLIS | 3.198 | 3,963 13-03-2018 | |
| Type of transaction |
Venue | Price (€) |
Volume | Date of the transaction |
|---|---|---|---|---|
| Purchase | XLIS | 3.090 | 5,000 | 14-03-2018 |
| Purchase | XLIS | 3.094 | 5,000 | 14-03-2018 |
| Purchase | XLIS | 3.098 | 5,000 | 14-03-2018 |
| Purchase | XLIS | 3.100 | 21,928 | 14-03-2018 |
| Purchase | XLIS | 3.104 | 2,500 | 14-03-2018 |
| Purchase | XLIS | 3.110 | 12,500 | 14-03-2018 |
| Purchase | XLIS | 3.120 | 17,500 | 14-03-2018 |
| Purchase | XLIS | 3.130 | 12,500 | 14-03-2018 |
CTT-CORREIOS DE PORTUGAL, S.A.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018 AND 31 DECEMBER 2017
| Euros |
|---|
| Unaudited | |||
|---|---|---|---|
| NOTES | 30.06.2018 | 31.12.2017 | |
| ASSETS | |||
| Non-current assets | |||
| Tangible fixed assets | 5 | 189,869,685 | 199,855,908 |
| Investment properties | 7 | 6,181,251 | 6,164,849 |
| Intangible assets | 6 | 47,510,348 | 47,501,684 |
| Goodwill Investments in associated companies |
9,523,180 296,260 |
9,523,180 296,260 |
|
| Other investments | 1,379,137 | 1,503,572 | |
| Investment securities | 9 | 381,611,966 | - |
| Investments held to maturity | 9 | - | 245,827,759 |
| Other non-current assets | 1,573,332 | 1,375,223 | |
| Credit to banking clients | 11 | 128,063,715 | 64,263,948 |
| Financial assets available for sale | 9 | - | 3,175,180 |
| Other banking financial assets | 10 | 16,934,779 | 11,831,122 |
| Deferred tax assets | 24 | 84,140,391 | 87,155,739 |
| Total non-current assets | 867,084,044 | 678,474,423 | |
| Current assets | |||
| Inventories | 6,008,086 | 5,696,996 | |
| Accounts receivable | 143,339,295 | 132,480,130 | |
| Credit to banking clients | 11 | 21,167,444 | 15,083,442 |
| Income taxes receivable | 21 | 876,753 | 1,552,005 |
| Deferrals | 12 | 8,696,784 | 6,600,115 |
| Investment securities | 9 | 19,867,257 | - |
| Investments held to maturity | 9 | - | 15,721,373 |
| Other current assets | 41,726,563 | 32,338,234 | |
| Financial assets available for sale Other banking financial assets |
9 10 |
- 90,383,101 |
2,576,194 91,417,084 |
| Cash and cash equivalents | 591,709,654 | 626,825,397 | |
| 923,774,936 | 930,290,969 | ||
| Non-current assets held for sale | 1,741,045 | - | |
| Total current assets | 925,515,981 | 930,290,969 | |
| Total assets | 1,792,600,025 | 1,608,765,392 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | 14 | 75,000,000 | 75,000,000 |
| Own shares | (8) | (8) | |
| Reserves | 15 | 65,847,086 | 79,947,883 |
| Retained earnings | 15 | 17,149,866 | 34,268,089 |
| Other changes in equity | 15 | (32,634,996) | (32,634,996) |
| Net profit Equity attributable to equity holders |
6,250,289 131,612,237 |
27,263,244 183,844,211 |
|
| Non-controlling interests | 170,944 | 146,738 | |
| Total equity | 131,783,181 | 183,990,949 | |
| Liabilities | |||
| Non-current liabilities | |||
| Medium and long term debt | 64,018 | 73,689 | |
| Employee benefits | 250,953,015 | 252,919,533 | |
| Provisions | 18 | 17,558,012 | 26,028,332 |
| Deferrals | 12 | 311,292 | 316,892 |
| Deferred tax liabilities Total non-current liabilities |
24 | 3,284,956 272,171,293 |
3,399,121 282,737,567 |
| Current liabilities | |||
| Accounts payable Banking clients' deposits and other loans |
19 20 |
511,648,562 736,395,503 |
384,533,294 619,229,680 |
| Employee benefits | 16,769,674 | 17,100,808 | |
| Short term debt | 2,475,704 | 10,304,390 | |
| Deferrals | 12 | 2,299,042 | 1,432,696 |
| Other current liabilities | 100,629,730 | 91,553,848 | |
| Other banking financial liabilities | 10 | 18,427,335 | 17,882,160 |
| Total current liabilities | 1,388,645,551 | 1,142,036,875 | |
| Total liabilities Total equity and liabilities |
1,660,816,844 1,792,600,025 |
1,424,774,442 1,608,765,392 |
The attached notes are an integral part of these financial statements.
CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2018 AND 30 JUNE 2017
| Six months ended | Three months ended | ||||
|---|---|---|---|---|---|
| Unaudited | Unaudited | Unaudited | Unaudited | ||
| NOTES | 30.06.2018 | 30.06.2017 | 30.06.2018 | 30.06.2017 | |
| Revenues | 355,134,939 | 352,113,592 | 178,191,902 | 175,157,996 | |
| Sales and services rendered | 4 | 343,659,196 | 340,466,142 | 172,590,167 | 167,311,889 |
| Financial margin | 3,314,927 | 1,161,179 | 1,811,690 | 755,953 | |
| Other operating income | 22 | 8,160,815 | 10,486,271 | 3,790,045 | 7,090,154 |
| Operating costs | (340,800,303) | (321,558,792) | (173,489,576) | (162,186,129) | |
| Cost of sales | (6,391,685) | (4,968,503) | (3,164,121) | (2,771,830) | |
| External supplies and services | (128,537,101) | (120,035,994) | (65,929,663) | (61,203,746) | |
| Staff costs | 23 | (183,151,744) | (174,221,448) | (93,409,293) | (85,657,444) |
| Impairment of accounts receivable, net | (292,253) | (305,009) | (405,272) | (241,218) | |
| Impairment of other financial banking assets | 141,687 | - | 127,650 | 9,002 | |
| Provisions, net | 18 | (1,213,765) | 13,074 | 194,713 | 71,106 |
| Depreciation/amortisation and impairment of investments, net | (15,318,720) | (14,900,430) | (7,824,577) | (7,721,878) | |
| Other operating costs | (6,036,723) | (7,140,482) | (3,079,013) | (4,670,121) | |
| Earnings before financial income and taxes | 14,334,635 | 30,554,800 | 4,702,326 | 12,971,867 | |
| Financial results | (2,661,000) | (2,399,840) | (1,408,579) | (1,321,226) | |
| Interest expenses | (2,783,554) | (2,684,908) | (1,390,062) | (1,340,516) | |
| Interest income | 24,961 | 285,068 | 6,682 | 19,290 | |
| Gains/losses in associated companies | 97,593 | - | (25,199) | - | |
| Earnings before taxes | 11,673,635 | 28,154,960 | 3,293,747 | 11,650,641 | |
| Income tax for the period | 24 | (5,395,976) | (10,459,815) | (2,396,404) | (4,260,062) |
| Net profit for the period | 6,277,659 | 17,695,145 | 897,343 | 7,390,579 | |
| Net profit for the period attributable to: | |||||
| Equity holders | 6,250,289 | 17,745,099 | 894,091 | 7,410,608 | |
| Non-controlling interests | 27,370 | (49,954) | 3,252 | (20,029) | |
| Earnings per share: | 17 | 0.04 | 0.12 | 0.01 | 0.05 |
CTT-CORREIOS DE PORTUGAL, S.A.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2018 AND 30 JUNE 2017
Euros
| Three months ended | |||||
|---|---|---|---|---|---|
| NOTES | Unaudited 30.06.2018 |
Unaudited 30.06.2017 |
Unaudited 30.06.2018 |
Unaudited 30.06.2017 |
|
| Net profit for the period | 6,277,660 | 17,695,145 | 897,343 | 7,390,579 | |
| Adjustments from application of the equity method (non re-classifiable adjustment to profit and loss) |
15 | (3,164) | (4,644) | (5,060) | (15,062) |
| Changes to fair value reserves Other changes in equity |
15 | (11,436) (3,164) |
29,052 (4,644) |
(12,528) (5,059) |
18,871 (15,062) |
| Other comprehensive income for the period after taxes | (17,763) | 19,763 | (22,647) | (11,254) | |
| Comprehensive income for the period | 6,259,897 | 17,714,908 | 874,696 | 7,379,325 | |
| Attributable to non-controlling interests Attributable to shareholders of CTT |
24,206 6,235,690 |
(54,599) 17,769,507 |
(1,807) 876,503 |
(35,092) 7,414,417 |
The attached notes are an integral part of these financial statements.
| Es ctt | ||
|---|---|---|
| 不可以 |
| 6,775 24,206 170,944 (79,135) 367,020 - - - - 367,020 - - - (147,921) (141,146) 146,738 - - 146,738 - - - (3,164) - - 27,370 62,160,395 27,263,244 27,263,244 27,263,244 6,250,289 6,250,289 - - (62,160,395) - - (62,160,395) - - - - 27,263,244 - - (27,263,244) - (27,263,244) - - - 6,250,289 93,589,211 62,160,395 18,482 18,482 34,268,089 32,800,424 27,263,244 17,149,866 (49,500,000) - (72,000,000) - (59,339,605) - - - - (185,718) (1,281,946) (41,627,778) (14,364,534) (1,282,861) - (3,164) - (1,286,025) (27,137,824) - - - - - - - (5,497,172) - - - (5,497,172) (32,634,996) - - (32,634,996) - - - - - - - - (32,634,996) 34,891,671 1,282,861 45,019,362 36,849 79,947,883 79,947,883 1,271,425 65,847,086 - 49,500,000 - - (4,480,638) - - 36,849 - - - - - (15,372,222) (15,372,222) (11,436) - - 5,097,527 5,097,527 (5,097,536) - - - - - - - - - - (8) - - (8) - - - - - - - - (8) 75,000,000 49,500,000 (49,500,000) - - - - - - - - - - 75,000,000 - - 75,000,000 - - - - - - - - 75,000,000 15 15 15 16 15 15 15 15 15 16 15 15 15 3 3 Actuarial gains/losses - Health Care, net from deferred taxes Adjustments from the application of the equity method Adjustments from the application of the equity method Adjustment on initial application of IFRS 15 (net of tax) Adjustment on initial application of IFRS 9 (net of tax) Appropriation of net profit for the year of 2016 Appropriation of net profit for the year of 2017 Balance on 30 June 2018 (Unaudited) Comprehensive income for the period Comprehensive income for the period Balance on 31 December 2017 Changes to fair value reserves Changes to fair value reserves Balance on 1 January 2017 Attribution of own shares Net profit for the period Net profit for the period Share capital decrease Share capital increase Other movements Other movements Dividends Dividends |
NOTES | Share capital | Own Shares | Reserves | Other changes in equity |
Retained earnings | Net profit for the year | Non-controlling interests |
Total | |
|---|---|---|---|---|---|---|---|---|---|---|
| Adjusted balance on 1 January 2018 | 233,326,782 | |||||||||
| 367,020 | ||||||||||
| - | ||||||||||
| - | ||||||||||
| (72,000,000) | ||||||||||
| 616,890 | ||||||||||
| (71,016,090) | ||||||||||
| 6,775 | ||||||||||
| (5,497,172) | ||||||||||
| 36,849 | ||||||||||
| 18,482 | ||||||||||
| 27,115,323 | ||||||||||
| 21,680,257 | ||||||||||
| 183,990,949 | ||||||||||
| (185,718) | ||||||||||
| (1,281,946) | ||||||||||
| 182,523,285 | ||||||||||
| - | ||||||||||
| (57,000,000) | ||||||||||
| (57,000,000) | ||||||||||
| (3,164) | ||||||||||
| (11,436) | ||||||||||
| (3,164) | ||||||||||
| 6,277,660 | ||||||||||
| 6,259,897 | ||||||||||
| 131,783,181 |
CTT-CORREIOS DE PORTUGAL, S.A.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 30 JUNE 2018 AND 31 DECEMBER 2017
Euros
The attached notes are an integral part of these financial statements.
CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2018 AND 30 JUNE 2017 Euro
| NOTES 30.06.2018 30.06.2017 Cash flow from operating activities Collections from customers 337,818,513 325,692,517 Payments to suppliers (143,564,195) (119,507,305) Payments to employees (170,753,434) (154,598,461) Banking customer deposits and other loans 117,202,832 170,437,230 Credit to banking clients (69,586,527) (25,502,790) Cash flow generated by operations 71,117,189 196,521,191 Payments/receivables of income taxes (2,035,389) (901,032) Other receivables/payments 120,826,390 101,097,389 Cash flow from operating activities (1) 189,908,190 296,717,548 Cash flow from investing activities Receivables resulting from: Tangible fixed assets 35,600 3,040,720 Investment properties 1,246,000 - Financial investments 222,028 - Investment securities 26,835,918 - Financial assets available for sale - 5,600,000 Investments held to maturity - 1,253,248 Demand deposits at Bank of Portugal 26,575,467 3,721,804 Other banking financial assets 53,005,000 62,965,000 Interest income 138,987 400,470 Payments resulting from: Tangible fixed assets (6,581,222) (16,133,750) Intangible assets (10,553,749) (6,793,156) Financial investments - (1,728,091) Investment securities (167,589,214) - Financial assets available for sale - (13,733,418) Investments held to maturity - (77,279,085) Other banking financial assets (56,820,000) (79,215,000) Cash flow from investing activities (2) (133,485,185) (117,901,258) Cash flow from financing activities Receivables resulting from: Loans obtained 11,246,806 4,550,000 Payments resulting from: Loans repaid (19,074,050) (5,506,409) Interest expenses (153,605) (359,494) Finance leases (10,699) (454,088) Dividends 16 (57,000,000) (72,000,000) Cash flow from financing activities (3) (64,991,547) (73,769,991) Net change in cash and cash equivalents (1+2+3) (8,568,541) 105,046,299 Changes in the consolidation perimeter - 134,862 Cash and equivalents at the beginning of the period 592,677,415 613,845,248 Cash and cash equivalents at the end of the period 584,108,874 719,026,409 Cash and cash equivalents at the end of the period 584,108,874 719,026,409 Sight deposits at Bank of Portugal 6,180,514 70,529 Outstanding checks of Banco CTT / Checks clearing of Banco CTT 1,518,342 1,194,259 Impairment of slight and term deposits (98,076) - |
Unaudited | Unaudited | ||
|---|---|---|---|---|
| Cash and cash equivalents (Balance sheet) | 591,709,654 | 720,291,197 |
The attached notes are an integral part of these financial statements.
| 1. | INTRODUCTION56 | |
|---|---|---|
| 2. | SIGNIFICANT ACCOUNTING POLICIES 57 | |
| 2.1 Basis of presentation57 | ||
| 3. | CHANGES TO ACCOUNTING POLICIES, ERRORS AND ESTIMATES57 | |
| 4. | SEGMENT REPORTING60 | |
| 5. | TANGIBLE FIXED ASSETS63 | |
| 6. | INTANGIBLE ASSETS65 | |
| 7. | INVESTMENT PROPERTIES 67 | |
| 8. | COMPANIES INCLUDED IN THE CONSOLIDATION68 | |
| 9. | INVESTMENT SECURITIES, INVESTMENTS HELD TO MATURITY AND FINANCIAL ASSETS AVAILABLE FORSALE 69 |
|
| 10. | OTHER BANKING FINANCIAL ASSETS AND LIABILITIES 72 | |
| 11. | CREDIT TO BANKING CLIENTS72 | |
| 12. | DEFERRALS74 | |
| 13. | ACCUMULATED IMPAIRMENT LOSSES 74 | |
| 14. | EQUITY75 | |
| 15. | RESERVES, OTHER CHANGES IN EQUITY AND RETAINED EARNINGS 77 | |
| 16. | DIVIDENDS78 | |
| 17. | EARNINGS PER SHARE 79 | |
| 18. | PROVISIONS, GUARANTEES PROVIDED, CONTINGENT LIABILITIES AND COMMITMENTS79 | |
| 19. | ACCOUNTS PAYABLE82 | |
| 20. | BANKING CLIENTS' DEPOSITS AND OTHER LOANS82 | |
| 21. | INCOME TAXES RECEIVABLE /PAYABLE 83 | |
| 22. | OTHER OPERATING INCOME83 | |
| 23. | STAFF COSTS83 | |
| 24. | INCOME TAX FOR THE PERIOD85 | |
| 25. | RELATED PARTIES 87 | |
| 26. | OTHER INFORMATION88 | |
| 27. | SUBSEQUENT EVENTS89 |
CTT –Correios de Portugal, S.A. –Sociedade Aberta ("CTT" or "Company"), with head office at Avenida D. João II, no. 13, 1999-001 in Lisbon, had its origin in the "Administração Geral dos Correios Telégrafos e Telefones" government department and its legal form is the result of successive re-organisations carried out by the Portuguese state business sector in the Communications area.
Decree-Law no. 49.368 of 10 November 1969 founded the state-owned company CTT - Correios e Telecomunicações de Portugal, E. P., which started operating on 1 January 1970. By Decree-Law no. 87/92, of 14 May, CTT –Correios e Telecomunicações de Portugal, E. P., was transformed into a legal entity governed by private law, with the status of a state-owned public limited company. Finally, with the foundation of the former Telecom Portugal, S.A. by spin-off from Correios e Telecomunicações de Portugal, S.A. under Decree-Law no. 277/92 of 15 December, the Company's name was changed to the current CTT – Correios de Portugal, S.A..
On 31 January 2013 the Portuguese State through the Order no. 2468/12 – SETF, of 28 December, determined the transfer of the investment owned by the Portuguese State in CTT to Parpública – Participações Públicas, SGPS, S.A..
At the General Meeting held on 30 October 2013, the registered capital of CTT was reduced to 75,000,000 Euros, being from that date onwards represented by 150,000,000 shares, as a result of a stock split which was accomplished through the reduction of the nominal value from 4.99 Euros to 0.50 Euros.
During 2013, CTT's capital was opened to the private sector. Supported by Decree-Law no. 129/2013 of 6 September and the Resolution of the Council of Ministers ("RCM") no. 62-A/2013, of 10 October, the RCM no. 62-B/2013, of 10 October and RCM no. 72-B/2013, of 14 November, the first phase of privatisation of the capital of CTT took place on 5 December 2013. From this date, 63.64% of the shares of CTT (95.5 million shares) were owned by the private sector, of which 14% (21 million shares) were sold in a Public Offering and 49.64% (74.5 million shares) by Institutional Direct Selling. On 31 December 2013 the Portuguese State, through Parpública - Participações Públicas, SGPS, S.A. held 36.36% of the shares of CTT, 30.00% by detention and 6.36% by allocation.
On 5 September 2014, the second phase of the privatisation of CTT took place. The shares held by Parpública - Participações Públicas, SGPS, S.A., which on that date represented 31.503% of CTT's capital, were subject to a private offering of Shares ("Equity Offering") via an accelerated bookbuilding process. The Equity Offering was addressed exclusively to institutional investors.
The shares of CTT are listed on Euronext Lisbon.
The interim condensed consolidated financial statements attached herewith are expressed in Euros, as this is the functional currency of the Group.
These interim condensed consolidated financial statements were approved by the Board of Directors and authorised for issue on 31 July 2018.
The accounting policies adopted, including financial risk management policies, are consistent with those followed in the preparation of the consolidated financial statements for the year ended 31 December 2017, except for the changes mentioned in section 3. Changes to accounting policies, errors and estimates.
The interim condensed consolidated financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards ("IAS / IFRS") as adopted by the European Union as at 1 January 2018, and in accordance with IAS 34 - Interim Financial Reporting.
The Group has initially adopted IFRS 15 Revenue from Contracts with Customer and IFRS 9 Financial Instruments as at 1 January 2018.
IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement.
IFRS 9 established a new impairment model. In this way, loss event will no longer need to occur before an impairment loss is recognised.
As soon as the loss event occur (what is currently defined as "objective evidence of impairment"), the accumulated impairment is allocated directly to the financial asset affected, thus providing, from that point on, a similar treatment the IAS 39, including the treatment of interest revenue.
One of the main amendments resulting from the adoption of this standard is the recognition of the impairment recognition of impairment on the exposure to securities, bank deposits and other financial applications, which was not required under IAS 39, except if there was objective evidence of impairment.
The impacts of the adoption of IFRS 9 are detailed as follows:
| Impact of adopting IFRS 9 at 1 January 2018 |
Impact on the period | Impact of adopting IFRS 9 at 30 June 2018 |
|
|---|---|---|---|
| Banco CTT - Investments held to maturity, Financial assets available for sale, Cash and Other financial applications |
(882,083) | 245,732 | (636,351) |
| Banco CTT - Account Receivables | 2,713 | (1) | (1) |
| Other Companies - Cash and Equivalents and Fin. Investments | (405,982) | 308,788 | (97,194) |
| Other Companies - Account Receivables | 883,882 | 317,635 | 1,201,517 |
| Related Tax | 215,752 | (201,411) | 14,341 |
| Impact | (185,718) | 670,744 | 482,313 |
(1) Taking into account that the amount is residual, the impairment was not calculated in accordance with IAS 39 on 30.06.2018
The change in the accounting policy resulting from the adoption of IFRS 9 was applied retrospectively, except for the option not to restate comparative information for prior periods in relation to classification and measurement requirements (including impairment). The differences in the accounting amount of financial assets and liabilities resulting from the adoption of IFRS 9 were recognized in retained earnings with reference to 1 January 2018.
Comparing with the previous standard, there was the need to reclassify and re-measure the financial assets and liabilities in accordance with IFRS 9, therefore the new classification and measurement was applied to the amounts as at 1 January 2018, as shown below:
| 01.01.2018 | ||||
|---|---|---|---|---|
| Original classification under IAS 39 |
New classification under IFRS 9 |
Original carrying amount under IAS 39 |
New carrying amount under IFRS 9 |
|
| Assets | ||||
| Other Investments | Available-for-sale financial assets |
Fair Value through Other Comprehensive Income |
1,503,572 | 1,503,572 |
| Investments held to maturity | Investments held to maturity |
Amortised Cost | 261,549,132 | 261,302,060 |
| Other assets | Loans and receivables | Amortised Cost | 33,713,457 | 33,713,457 |
| Financial assets available for sale | Available-for-sale financial assets |
Fair Value through Other Comprehensive Income |
5,751,374 | 5,740,688 |
| Credit to bank clients | Loans and receivables | Amortised Cost | 79,347,390 | 79,350,103 |
| Other banking financial assets | Loans and receivables | Amortised Cost | 103,248,206 | 102,624,809 |
| Accounts receivable | Loans and receivables | Amortised Cost | 132,480,130 | 133,364,012 |
| Cash and cash equivalents | Loans and receivables | Amortised Cost | 626,825,397 | 626,418,487 |
| Total Financial Assets | 1,244,418,658 | 1,244,017,188 |
The adoption of IFRS 9 represents a significant change to the methodology and calculation of impairments in banks.
Due to the absence of past records, Banco CTT based the calculation on benchmarking of parameters making the needed adjustments in order to migrate from the vision of loss incurred to the vision of expected credit loss (ECL).
The analysis framework of credit risk is based on a model of collective and individual analysis. In the collective analysis, basically, Banco CTT considers that the probability of default (PD) is constant over the instruments' life time and applies in stage 2 a methodology of survival rate to calculate the PD of each period of the instrument's life time that it is multiplied by the Loss Given Default (LGD), which, in turn, is a function of expected exposure in each period and the existing collateral in the operation. Finally, Banco CTT updates the expected value of the all the periods considered (12 months in stage 1, life time in stages 2 and 3).
In the individual analysis, Banco CTT begins by evaluating the existence of objective evidence of impairment. If it does not exist, the credit losses are treated as stage 1. If there is objective evidence of impairment, the impairment losses are calculated by comparing the present value of expected future cash flows discounted at the original effective interest rate of each contract and the accounting value for each credit. The losses are recorded against profit or loss.
In the portfolio of securities and cash and cash equivalents and financial investments, the impairments are calculated by assigning i) a probability of default that derives from the rating of the issuer or counterparty, respectively, and ii) a Loss Given Default (LGD) that results from market parameters.
In the portfolio of securities and cash equivalents and financial investments, the impairments are calculated by assigning i) a probability of default that derives from the rating of the issuer or counterparty, respectively and ii) a Loss Given Default (LGD) that results from market parameters.
Regarding the remaining companies, the Group applies the simplified method and registers expected credit losses until maturity for all accounts receivables. The expected credit losses were calculated based on past records of credit losses throughout the period considered statistically relevant, estimating the rate of expected losses by companies and customer typology.
The revenue recognition model according to IFRS 15 is based on five steps in order to determine when the revenue should be recognised and the amount:
According to the new model, the revenue recognition depends on whether the "performance obligations" are satisfied over the period or, on the contrary, the control of the goods or services is transferred to the customer at a given point in time. The revenue should be recognised for the amount that the company expects to receive.
The impacts of the adoption of IFRS 15 are detailed as follows:
| Impact of adopting IFRS 15 at 1 January 2018 |
Impact on the period | Impact of adopting IFRS 15 at 30 June 2018 |
|
|---|---|---|---|
| Sales of philatelic and pre-paid products | (782,046) | 116,225 | (665,821) |
| Rendering of Express Services | (822,765) | 154,338 | (668,426) |
| Related Tax | 322,865 | (37,470) | 285,394 |
| Impact | (1,281,946) | 233,092 | (1,048,853) |
The Group decided to adopt IFRS 15 using the cumulative effect method ("modified retrospective approach"), with the effect of the initial application of this standard recognised at the date of initial application (i.e. 1 January 2018). As a result, the Group will not apply the requirements of IFRS 15 to the comparative period presented.
According to the analysis performed, in the CTT Group, the adoption of IFRS 15 had the following impacts:
a) Sales of philatelic and pre-paid products
Before the adoption of this new standard, the revenue was recognised when the philatelic and pre-paid products were sold.
Under IFRS 15, the revenue is recognised only when the performance obligation is satisfied, i.e., only at the moment of the effective utilisation of the products for mail delivery purposes. However, as some of these products have never been used by the clients, for example the philatelic products for stamps collection, CTT performed a customer survey in order to obtain information regarding the use pattern of these products and, in this way, assess the percentage of the products that are not expected to be used. In these situations, the
revenue should be recognised at the time of the sale. In the remaining situations, the adoption of the IFRS 15 implies the deferral of the revenue given the current policy.
b) Rendering of Express Services
Before the adoption of this new standard, the revenue from the rendering of express services (parcels) was recognised when the customer requested the service at our retail network.
According to IFRS 15, the revenue is recognised only when the performance obligation is satisfied, i.e., only when the mail or parcel is delivered to the final customer. The adoption of the IFRS 15 implies the deferral of the revenue given the current policy.
The underlying estimates and assumptions were determined based on the best knowledge of the on-going events and transactions, at the time the financial statements were approved, as well as on the experience of past and/or current events.
In accordance with IFRS 8, the Group discloses the segment financial reporting.
The Board of Directors regularly reviews segmental reports, using them to assess and communicate each segment performance, as well as to decide on how to allocate resources.
In 2018, Payshop became a subsidiary of Banco CTT, through a capital increase operation in which all the shares representing the share capital of Payshop (Portugal), S.A. were transferred to Banco CTT. This operation is aligned with the strategy of concentrating the Group's business lines related to the financial sector at Banco CTT as well as with the project submitted to Banco de Portugal at the time of its creation.
The comparable information for 2017 has been restated, having Payshop been included in Banco CTT segment.
Therefore, the business of CTT is organised in the following segments:
The segments cover the three CTT business areas, as follows:
Besides the four above mentioned segments, there are two sales channels, which are common to all businesses and products, the Retail Network and the Sales Department. In this analysis, the Retail Network, which is connected to the obligations of the universal postal service concession, is incorporated in the Mail segment as well as the Sales Departments, and integrates internal revenues related to the provision of services to other segments, as well as the sale in its network of third-party products and services.
The amounts reported in each business segment result from the aggregation of the subsidiaries and business units defined in each segment perimeter and the elimination of transactions between companies of the same segment.
The statement of financial position of each subsidiary and business unit is determined based on the amounts booked directly in the companies that compose the segment, including the elimination of balances between companies of the same segment, and excluding the allocation in the segments of the adjustments between segments.
The income statement for each business segment is based on the amounts booked directly in the financial statements of the companies and related business units, adjusted by the elimination of transactions between companies of the same segment.
However, as CTT, S.A. has activity in more than one segment it was necessary to split its income and costs by the various operating segments. The Internal Services Rendered refer to services provided across the different CTT, S.A. business areas, and the income is calculated according to standard activities valued through transfer prices.
Initially, CTT, S.A. operating costs are allocated to the different segments by charging the internal transactions for the services mentioned above. After this initial allocation, costs relating to corporate and support areas (CTT Central Structure) previously unallocated, are allocated among the Mail and Financial Services segments according to the average number of CTT, S.A. employees affected to each of these segments.
With the allocation of all costs, the earnings before depreciation, provisions, impairments, financial results and taxes by segment in the first semester of 2018 and 2017 are as follows:
| 30.06.2018 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Euros | Express & Parcels | Financial Services |
Banco CTT (includes Payshop) |
CTT Central Structure |
Intragroup eliminations |
Others non allocated |
Total | |
| Revenues | 270,570,689 | 73,896,022 | 20,212,923 | 10,753,461 | 55,434,745 | (75,732,901) | - | 355,134,938 |
| Sales and services rendered | 250,007,857 | 72,911,872 | 19,056,252 | 5,264,599 | - | (3,581,384) | - | 343,659,196 |
| Sales | 8,794,071 | 417,370 | - | - | - | (242) | - | 9,211,199 |
| Services rendered | 241,213,786 | 72,494,502 | 19,056,252 | 5,264,599 | - | (3,581,142) | - | 334,447,997 |
| Financial Margin | - | - | - | 3,314,927 | - | - | - | 3,314,927 |
| Operating revenues external customers | 13,459,806 | 984,150 | 1,114,927 | 2,173,935 | 5,091,944 | (14,663,946) | - | 8,160,815 |
| Internal services rendered | 7,103,026 | - | 41,744 | - | 20,614,326 | (27,759,096) | - | - |
| Allocation to CTT central structure | - | - | - | - | 29,728,475 | (29,728,475) | - | - |
| Operating costs | (239,039,381) | (72,389,075) | (13,480,749) | (19,506,206) | (55,434,745) | 75,732,901 | - | (324,117,252) |
| External supplies and services | (51,496,001) | (59,533,025) | (4,212,233) | (11,537,978) | (19,999,397) | 18,241,532 | - | (128,537,101) |
| Staff costs | (130,621,030) | (11,679,097) | (1,240,991) | (6,769,891) | (32,840,735) | - | - | (183,151,744) |
| Other costs | (7,245,296) | (1,176,953) | (762,613) | (1,198,337) | (2,049,008) | 3,799 | - | (12,428,406) |
| Internal services rendered | (20,100,332) | - | (7,113,159) | - | (545,605) | 27,759,096 | - | - |
| Allocation to CTT central structure | (29,576,722) | - | (151,753) | - | - | 29,728,475 | - | - |
| EBITDA(1) | 31,531,308 | 1,506,947 | 6,732,174 | (8,752,745) | - | - | - | 31,017,686 |
| Depreciation/amortisation and impairment of | (7,868,079) | (1,705,289) | (277,109) | (1,497,862) | (3,855,971) | - | (114,410) | (15,318,720) |
| investments, net | ||||||||
| Impairment of accounts receivable, net | - | - | - | - | - | - | - | (292,253) |
| Impairment of non-depreciable assets | - | - | - | - | - | - | - | - |
| Impairment of other financial banking assets | - | - | - | - | - | - | - | 141,687 |
| Provisions, net | - | - | - | - | - | - | - | (1,213,765) |
| Interest expenses | - | - | - | - | - | - | - | (2,783,554) |
| Interest income Gains/losses in associated companies |
- - |
- - |
- - |
- - |
- - |
- - |
- - |
24,961 97,593 |
| Earnings before taxes | - | - | - | - | - | - | - | 11,673,635 |
| Income tax for the period | - | - | - | - | - | - | - | (5,395,976) |
| Net profit for the period | - | - | - | - | - | - | - | 6,277,659 |
| Non-controlling interests | - | - | - | - | - | - | - | 27,370 |
| Equity holders of parent company | - | - | - | - | - | - | - | 6,250,289 |
| (1) Operating results + depreciation/amortisation + provisions and impairment losses, net. | ||||||||
| 30.06.2017 Restated | ||||||||
| Euros | Express & Parcels | Financial Services |
Banco CTT (includes Payshop) |
CTT Central Structure |
Intragroup eliminations |
Others non allocated |
Total | |
| Revenues | 269,809,610 | 62,758,747 | 29,596,448 | 8,721,872 | 54,805,193 | (73,578,279) | - | 352,113,592 |
| Sales and services rendered | 248,171,506 | 61,702,526 | 29,003,004 | 5,134,902 | - | (3,545,797) | - | 340,466,142 |
| Sales | 7,212,345 | 390,807 | - | - | - | - | - | 7,603,152 |
| Services rendered | 240,959,161 | 61,311,719 | 29,003,004 | 5,134,902 | - | (3,545,797) | - | 332,862,990 |
| Financial Margin | - | - | - | 1,161,179 | - | - | - | 1,161,179 |
| Operating revenues external customers | 13,680,193 | 1,056,221 | 552,215 | 2,425,791 | 7,167,363 | (14,395,512) | - | 10,486,271 |
| Internal services rendered | 7,957,911 | - | 41,229 | - | 20,252,700 | (28,251,841) | - | - |
| Allocation to CTT central structure | - | - | - | - | 27,385,129 | (27,385,129) | - | - |
| Operating costs | (228,684,076) | (63,574,749) | (15,303,431) | (17,577,259) | (54,805,193) | 73,578,279 | - | (306,366,427) |
| External supplies and services | (50,498,019) | (50,630,616) | (4,660,290) | (10,687,789) | (21,406,570) | 17,847,290 | - | (120,035,994) |
| Staff costs | (124,562,528) | (11,778,060) | (1,430,554) | (6,443,002) | (30,099,677) | 92,373 | - | (174,221,448) |
| Other costs | (6,935,101) | (1,166,073) | (763,802) | (446,468) | (2,799,188) | 1,646 | - | (12,108,985) |
| Internal services rendered | (19,468,269) | - | (8,283,814) | - | (499,758) | 28,251,841 | - | - |
| Allocation to CTT central structure | (27,220,159) | - | (164,971) | - | - | 27,385,129 | - | - |
| EBITDA(1) | 41,125,534 | (816,002) | 14,293,017 | (8,855,387) | - | - | - | 45,747,165 |
| Depreciation/amortisation and impairment of | (7,902,876) | (1,818,196) | (106,024) | (1,353,140) | (3,629,032) | - | (91,161) | (14,900,430) |
| investments, net Impairment of accounts receivable, net |
- | - | - | - | - | - | - | (305,009) |
| Impairment of non-depreciable assets | - | - | - | - | - | - | - | - |
| Impairment of other financial banking assets | - | - | - | - | - | - | - | - |
| Provisions, net | - | - | - | - | - | - | - | 13,074 |
| Interest expenses | - | - | - | - | - | - | - | (2,684,908) |
| Interest income | - | - | - | - | - | - | - | 285,068 |
| Gains/losses in associated companies | - | - | - | - | - | - | - | - |
| Earnings before taxes | - | - | - | - | - | - | - | 28,154,960 |
| Income tax for the period | - | - | - | - | - | - | - | (10,459,815) |
| Net profit for the period | - | - | - | - | - | - | - | 17,695,145 |
| Non-controlling interests | - | - | - | - | - | - | - | (49,954) |
| Equity holders of parent company | - | - | - | - | - | - | - | 17,745,100 |
| (1) Operating results + depreciation/amortisation + provisions and impairment losses, net. |
| Thousand Euros | 30.06.2018 | 30.06.2017 Restated |
|
|---|---|---|---|
| 270,571 | 269,809 | ||
| Transactional mail | 210,139 | 208,122 | |
| Editorial mail | 7,651 | 8,273 | |
| Parcels (USO) | 3,350 | 3,543 | |
| Advertising mail | 12,537 | 14,360 | |
| Retail | 5,981 | 4,352 | |
| Philately | 3,863 | 3,907 | |
| Business Solutions | 4,777 | 4,242 | |
| Other | 22,272 | 23,011 | |
| Express & Parcels | 73,896 | 62,759 | |
| Financial Services | 20,213 | 29,597 | |
| Banco CTT | 10,753 | 8,722 | |
| Banco CTT | 5,472 | 3,516 | |
| Payshop | 5,282 | 5,206 | |
| CTT Central Structure | 55,435 | 54,805 | |
| Intragroup eliminations | (75,733) | (73,578) | |
| 355,135 | 352,114 |
| 30.06.2018 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Assets (Euros) | Express & Parcels | Financial Services |
Banco CTT (includes Payshop) |
CTT Central Structure |
Non allocated assets |
Total | ||
| Intagible assets | 3,605,373 | 4,522,623 | 325,993 | 22,822,050 | 8,798,673 | 7,435,637 | 47,510,348 | |
| Tangible fixed assets | 160,811,793 | 13,820,523 | 1,877 | 656,872 | 12,480,753 | 2,097,867 | 189,869,685 | |
| Investment properties | - | - | - | - | - | 6,181,251 | 6,181,251 | |
| Goodwill | 6,161,326 | 2,955,753 | - | 406,101 | - | - | 9,523,180 | |
| Deferred tax assets | - | - | - | - | - | 84,140,391 | 84,140,391 | |
| Accounts receivable | - | - | - | - | - | 143,339,295 | 143,339,295 | |
| Credit to bank clients | - | - | - | 149,231,159 | - | - | 149,231,159 | |
| Investment securities | - | - | - | 401,479,223 | - | - | 401,479,223 | |
| Other banking financial assets | - | - | - | 107,317,880 | - | - | 107,317,880 | |
| Other assets | - | - | - | - | - | 60,556,915 | 60,556,915 | |
| Cash and cash equivalents | - | - | - | - | - | 591,709,654 | 591,709,654 | |
| Non-current assets held for sale | - | - | - | - | - | 1,741,045 | 1,741,045 | |
| 170,578,492 | 21,298,899 | 327,870 | 681,913,285 | 21,279,426 | 897,202,055 | 1,792,600,026 |
| 31.12.2017 Restated | ||||||||
|---|---|---|---|---|---|---|---|---|
| Assets (Euros) | Express & Parcels | Financial Services |
Banco CTT | CTT Central Structure |
Non allocated assets |
Total | ||
| Intagible assets | 3,119,896 | 5,005,423 | 404,038 | 21,211,707 | 7,631,667 | 10,128,953 | 47,501,684 | |
| Tangible fixed assets | 167,562,232 | 14,477,996 | 2,231 | 815,209 | 15,141,231 | 1,857,009 | 199,855,908 | |
| Investment properties | - | - | - | - | - | 6,164,849 | 6,164,849 | |
| Goodwill | 6,161,326 | 2,955,753 | - | 406,101 | - | - | 9,523,180 | |
| Deferred tax assets | - | - | - | - | - | 87,155,739 | 87,155,739 | |
| Accounts receivable | - | - | - | - | - | 132,480,130 | 132,480,130 | |
| Credit to bank clients | - | - | - | 79,347,390 | - | - | 79,347,390 | |
| Investments held to maturity | - | - | - | 261,549,132 | - | - | 261,549,132 | |
| Financial assets available for sale | - | - | - | 5,751,374 | - | - | 5,751,374 | |
| Other banking financial assets | - | - | - | 103,248,206 | - | - | 103,248,206 | |
| Other assets | - | - | - | - | - | 49,362,404 | 49,362,404 | |
| Cash and cash equivalents | - | - | - | - | - | 626,825,397 | 626,825,397 | |
| Non-current assets held for sale | - | - | - | - | - | - | - | |
| 176,843,454 | 22,439,172 | 406,269 | 472,329,119 | 22,772,898 | 913,974,480 | 1,608,765,392 |
| 30.06.2018 | |||||||
|---|---|---|---|---|---|---|---|
| Other information (Euros) | Express & Parcels | Financial Services | Banco CTT | CTT Central Struture |
Total | ||
| Medium and long-term debt | - | 64,018 | - | - | - | 64,018 | |
| Bank loans | - | 50,659 | - | - | - | 50,659 | |
| Leasings | - | 13,359 | - | - | - | 13,359 | |
| Short-term debt | - | 2,475,704 | - | - | - | 2,475,704 | |
| Bank loans | - | 2,445,015 | - | - | - | 2,445,015 | |
| Leasings | - | 30,689 | - | - | - | 30,689 | |
| - | 2,539,722 | - | - | - | 2,539,722 | ||
| 31.12.2017 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Other information (Euros) | Express & Parcels | Financial Services | Banco CTT | CTT Central Struture |
Total | ||||
| Medium and long-term debt | - | 73,689 | - | - | - | 73,689 | |||
| Bank loans | - | 49,596 | - | - | - | 49,596 | |||
| Leasings | - | 24,093 | - | - | - | 24,093 | |||
| Short-term debt | - | 10,304,390 | - | - | - | 10,304,390 | |||
| Bank loans | - | 10,272,258 | - | - | - | 10,272,258 | |||
| Leasings | - | 32,132 | - | - | - | 32,132 | |||
| - | 10,378,079 | - | - | - | 10,378,079 |
The CTT Group is domiciled in Portugal. The result of its Sales and services rendered by geographical areas is disclosed below:
| Thousand Euros | 30.06.2018 | 30.06.201 7 |
|---|---|---|
| Revenue - Portugal | 292,776 | 298,488 |
| Revenue - other countries | 50,884 | 41,978 |
| 343,659 | 340,466 |
The financial statements are subject to seasonality, however this does not affect comparability between identical periods in a given year. There are nonetheless atypical / non-recurring factors that may affect comparability between equal periods of the several years such as the number of working days of the period (mobile holidays or weekend holidays), special events (elections, promotional campaigns for clients) which may impact the revenue, leading to its increase / decrease from one period to another.
During the six-month period ended 30 June 2018 and the year ended 31 December 2017, the movements occurred in Tangible fixed assets, as well as in the respective accumulated depreciation, were as follows:
| 30.06.2018 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Land and natural resources |
Buildings and other constructions |
Basic equipment | Transport equipment |
Office equipment | Other tangible fixed assets |
Tangible fixed assets in progress |
Advance payments to suppliers |
Total | |
| Tangible fixed assets | |||||||||
| Opening balance | 37,102,139 | 342,655,745 | 146,667,392 | 3,381,283 | 62,174,555 | 26,040,114 | 1,500,567 | 391,109 | 619,912,904 |
| Acquisitions | - | 42,697 | 738,050 | 1,637 | 326,632 | 105,472 | 1,724,505 | (37,683) | 2,901,310 |
| Disposals | - | - | (443,168) | - | - | - | - | - | (443,168) |
| Transfers and write-offs | (547,279) | (4,243,459) | (4,034,332) | - | - | - | (1,367,511) | (959) | (10,193,540) |
| Adjustments | - | (9,751) | (34,952) | 346 | (22,701) | 482 | - | (47,608) | (114,184) |
| Closing balance | 36,554,860 | 338,445,233 | 142,892,989 | 3,383,266 | 62,478,486 | 26,146,068 | 1,857,561 | 304,858 | 612,063,322 |
| Accumulated depreciation | |||||||||
| Opening balance | 3,851,494 | 207,661,484 | 128,294,129 | 3,271,073 | 55,716,402 | 21,213,074 | - | - | 420,007,656 |
| Depreciation for the period | - | 4,993,665 | 2,935,801 | 15,074 | 1,357,048 | 542,482 | - | - | 9,844,070 |
| Disposals | - | - | (366,112) | - | - | - | - | - | (366,112) |
| Transfers and write-offs | (53,433) | (3,261,096) | (4,034,444) | - | 112 | - | - | - | (7,348,861) |
| Adjustments | - | 63 | 8,548 | 288 | 714 | (2,069) | - | - | 7,544 |
| Closing balance | 3,798,061 | 209,394,116 | 126,837,923 | 3,286,435 | 57,074,275 | 21,753,487 | - | - | 422,144,296 |
| Accumulated impairment | |||||||||
| Opening balance | - | - | - | - | - | 49,340 | - | - | 49,340 |
| Other variations | - | - | - | - | - | - | - | - | - |
| Closing balance | - | - | - | - | - | 49,340 | - | - | 49,340 |
| Net Tangible fixed assets | 32,756,799 | 129,051,117 | 16,055,066 | 96,831 | 5,404,211 | 4,343,241 | 1,857,561 | 304,858 | 189,869,685 |
| 31.12.2017 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Land and natural resources |
Buildings and other constructions |
Basic equipment | Transport equipment |
Office equipment | Other tangible fixed assets |
Tangible fixed assets in progress |
Advance payments to suppliers |
Total | |
| Tangible fixed assets | |||||||||
| Opening balance | 36,903,717 | 334,909,767 | 140,435,199 | 3,269,073 | 59,021,936 | 25,037,425 | 5,016,467 | 3,351,405 | 607,944,990 |
| Acquisitions | - | 300,889 | 5,013,385 | 81,568 | 2,087,373 | 741,212 | 2,277,480 | 475,458 | 10,977,364 |
| Disposals | - | (8,315) | (1,125,067) | - | (40,687) | (137) | - | - | (1,174,206) |
| Transfers and write-offs | 1,396 | 6,396,121 | 1,673,849 | - | 750,365 | (867,944) | (5,793,379) | (3,425,208) | (1,264,800) |
| Adjustments | - | (44,923) | (61,259) | (247) | (61,727) | (21,887) | - | (10,547) | (200,588) |
| Changes in the consolidation perimeter | 197,025 | 1,102,206 | 731,285 | 30,889 | 417,295 | 1,151,444 | - | - | 3,630,144 |
| Closing balance | 37,102,139 | 342,655,745 | 146,667,392 | 3,381,283 | 62,174,555 | 26,040,114 | 1,500,567 | 391,109 | 619,912,904 |
| Accumulated depreciation | |||||||||
| Opening balance | 3,851,494 | 197,359,750 | 121,934,623 | 3,208,997 | 52,255,805 | 20,239,484 | - | - | 398,850,154 |
| Depreciation for the period | - | 9,924,796 | 7,139,729 | 34,044 | 3,426,663 | 1,113,660 | - | - | 21,638,891 |
| Disposals | - | (7,026) | (1,096,952) | - | (40,236) | (137) | - | - | (1,144,351) |
| Transfers and write-offs | - | (39,113) | (158,051) | - | (145,697) | (712,315) | - | - | (1,055,176) |
| Adjustments | - | 274 | 15,044 | (404) | 1,082 | (6) | - | - | 15,989 |
| Changes in the consolidation perimeter | - | 422,804 | 459,736 | 28,437 | 218,784 | 572,388 | - | - | 1,702,149 |
| Closing balance | 3,851,494 | 207,661,484 | 128,294,129 | 3,271,073 | 55,716,402 | 21,213,074 | - | - | 420,007,656 |
| Accumulated impairment | |||||||||
| Opening balance | - | - | - | - | - | 173,055 | - | - | 173,055 |
| Other variations | - | - | - | - | - | (123,714) | - | - | (123,714) |
| Closing balance | - | - | - | - | - | 49,340 | - | - | 49,340 |
| Net Tangible fixed assets | 33,250,644 | 134,994,262 | 18,373,263 | 110,210 | 6,458,153 | 4,777,700 | 1,500,567 | 391,109 | 199,855,908 |
During the six-month period ended 30 June 2018, Land and natural resources and Buildings and other constructions include 608,178 Euros (625,996 Euros as at 31 December 2017), related to land and property in co-ownership with MEO – Serviços de Comunicações e Multimédia, S.A..
In the year ended 31 December 2017, the caption Changes in the consolidation perimeter relates to the balances of the company Transporta – Transportes Porta a Porta, S.A. acquired in May 2017.
During the six-month period ended 30 June 2018, the most significant movements in Tangible fixed assets were the following:
The movements associated to acquisitions and transfers relate mostly to the capitalisation of repairs in own and third-party buildings of CTT and Tourline. They also include the transfer to the caption Non-current assets held for sale of the building located in Rua da Palma by CTT, following the conclusion of the promissory agreement for the sale of this property.
The amount of acquisitions mainly relates to the purchase of ATM's in the amount of 19 thousand Euros, bar code readers in the amount of 29 thousand Euros, scales in the amount of 25 thousand Euros and pallets for about 184 thousand Euros by CTT. CTT Contacto acquired a parcel sorting machines in the amount of 148 thousand Euros and Tourline acquired IT equipment worth approximately 231 thousand Euros and PDA's worth approximately 5 thousand Euros.
The amounts recorded under write-offs, are mainly due to the write-offs of CTT assets that were fully depreciated and considerably old.
The amount of acquisitions relates essentially to the purchase of several administrative equipment, namely safes and security doors totalling 21 thousand Euros, office furniture worth about 66 thousand Euros and the acquisition of personal computers for approximately 118 thousand Euros by CTT.
The amount of acquisitions mainly relates to prevention and safety equipment for approximately 89 thousand Euros by CTT.
The amounts under this heading are related to the recognition of improvements in own and third-party properties. The movements associated to transfers relate to the capitalisation of the assets in progress.
The depreciation recorded in the amount of 9,844,070 Euros (10,620,393 Euros on 30 June 2017), is booked under the heading Depreciation/amortisation and impairment of investments, net.
Contractual commitments related to Tangible fixed assets are as follows:
| 30.06.2018 | |
|---|---|
| Hardware firewall networks | 280,353 |
| Upgrades to mail sorting machines | 112,684 |
| CCTV, safes and security doors | 81,703 |
| Scales | 25,646 |
| Tractor Pneumatic System | 9,471 |
| Batteries | 5,307 |
| UPS | 4,869 |
| 520,032 |
During the six-month period ended 30 June 2018 and the year ended 31 December 2017, the movements which occurred in the main categories of Intangible assets, as well as the respective accumulated amortisation, were as follows:
| 30.06.2018 | |||||||
|---|---|---|---|---|---|---|---|
| Development projects |
Computer Software | Industrial property | Other intangible assets |
Intangible assets in progress |
Total | ||
| Intangible assets | |||||||
| Opening balance | 4,380,552 | 80,235,963 | 13,297,151 | 444,739 | 13,254,456 | 111,612,861 | |
| Acquisitions | - | 2,013,345 | 13,145 | - | 3,337,571 | 5,364,061 | |
| Transfers and write-offs | - | 5,710,432 | - | - | (5,710,432) | - | |
| Adjustments | - | - | 8,654 | - | - | 8,654 | |
| Closing balance | 4,380,552 | 87,959,740 | 13,318,950 | 444,739 | 10,881,595 | 116,985,577 | |
| Accumulated amortisation | |||||||
| Opening balance | 4,371,234 | 50,542,647 | 8,752,556 | 444,739 | - | 64,111,177 | |
| Amortisation for the period | 3,852 | 5,029,357 | 327,031 | - | - | 5,360,239 | |
| Adjustments | - | - | 3,812 | - | - | 3,812 | |
| Closing balance | 4,375,086 | 55,572,004 | 9,083,399 | 444,739 | - | 69,475,228 | |
| Net intangible assets | 5,466 | 32,387,736 | 4,235,551 | - | 10,881,595 | 47,510,348 |
| 31.12.2017 | |||||||
|---|---|---|---|---|---|---|---|
| Development projects |
Computer Software | Industrial property | Other intangible assets |
Intangible assets in progress |
Total | ||
| Intangible assets | |||||||
| Opening balance | 4,372,923 | 69,732,469 | 11,722,559 | 444,739 | 8,870,277 | 95,142,968 | |
| Acquisitions | - | 2,776,195 | 1,569,908 | - | 13,167,265 | 17,513,369 | |
| Transfers and write-offs | - | 7,727,299 | (16,833) | - | (8,802,367) | (1,091,901) | |
| Adjustments | - | - | 21,516 | - | - | 21,516 | |
| Changes in the consolidation perimeter | 7,629 | - | - | - | 19,281 | 26,910 | |
| Closing balance | 4,380,552 | 80,235,963 | 13,297,151 | 444,739 | 13,254,456 | 111,612,861 | |
| Accumulated amortisation | |||||||
| Opening balance | 4,360,060 | 43,021,166 | 8,400,280 | 444,739 | - | 56,226,245 | |
| Amortisation for the period | 10,495 | 8,740,207 | 361,397 | - | - | 9,112,100 | |
| Transfers and write-offs | - | (1,218,272) | (16,834) | - | - | (1,235,106) | |
| Adjustments | - | (454) | 7,713 | - | - | 7,259 | |
| Changes in the consolidation perimeter | 679 | - | - | - | - | 679 | |
| Closing balance | 4,371,234 | 50,542,647 | 8,752,556 | 444,739 | - | 64,111,177 | |
| Net intangible assets | 9,318 | 29,693,316 | 4,544,595 | - | 13,254,456 | 47,501,684 |
The caption Industrial property includes the license of the trademark "Payshop Internacional" of CTT Contacto, S.A., of 1,200,000 Euros. This license has an indefinite useful life, therefore it is not being amortised.
The transfers toComputer softwareoccurred in the six-monthperiod ended 30 June2018 in Intangible assets in progress to refer to IT projects which were completed during the period.
The amounts of 474,392 Euros and 424,936 Euros that werecapitalised in Computer software or in Intangible assets in progress as at 30 June 2018 and 30 June 2017, respectively, related to the staff costs incurred in the development of IT projects.
As at 30 June 2018, Intangible assets in progress relate to IT projects which are under development, of which the most relevant are:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| SAP Hana & Hybris Billing | 1,566,989 | 2,846,202 |
| Management information - Software | 1,009,159 | 901,204 |
| NAVE evolution | 788,277 | 736,189 |
| RAID - Software | 492,738 | 453,856 |
| Business Excellence - Software | 305,293 | 292,317 |
| FATCA/CRS | 255,846 | 170,291 |
| Security Identity Governance and Intelligence | 230,791 | 230,791 |
| SIGPOSTAL - software | 192,808 | - |
| Legacy aplications improvements | 188,288 | 617,767 |
| INTRANET CTT | 184,117 | - |
| International Accounts - Software | 170,547 | - |
| SADIP - Dynamics Change Plans | 159,702 | 141,983 |
| SAP developments | 157,059 | 144,997 |
| Mortgage loans - software | 148,884 | 491,317 |
| APARTADOS - Software | 137,348 | 136,220 |
| CRM - Sales Software | 120,266 | 287,602 |
| Lease Management - software | 119,894 | - |
| Customs Portal | 105,149 | - |
| DOL - Treatment and generation of schedules | 102,137 | 98,836 |
| BD SQL Server consolidation | - | 622,975 |
| Mail products evolution | - | 586,899 |
| X86 - Servers, storage and backup | - | 342,239 |
| 6,435,292 | 9,101,687 |
The amortisation for the period, of 5,360,239 Euros (4,188,876 Euros as at 30 June 2017), was recorded under Depreciation / amortisation and impairment of investments, net.
There are no Intangible assets with restricted ownership or any carrying amounts relative to any Intangible Assets which have been given as a guarantee of liabilities.
Contractual commitments relative to Intangible assets are as follows:
| 30.06.2018 | |
|---|---|
| SAP S/4 Hana e SAP Hybris | 1,573,718 |
| CBS - Core Banking System | 479,653 |
| SIG Postal | 359,643 |
| Software servers | 123,246 |
| Setup Infrastructure | 95,624 |
| Mailmanager | 52,275 |
| Data Protection Regulation (RGPD) | 51,733 |
| Iberian operator Solutions | 37,091 |
| App Receipts Online | 22,140 |
| New Offer Solutions | 22,080 |
| APP Mobility Android | 20,295 |
| Worflow Solution | 17,188 |
| Online Account Opening | 17,042 |
| Transaction Monitoring | 16,648 |
| ITSM Solution | 14,909 |
| Hybrid Mail | 6,642 |
| Consolidation SW | 5,230 |
| 2,915,157 |
As at 30 June 2018 and 31 December 2017, the Group has the following assets classified as investment properties:
| 30.06.2018 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Land and natural resources |
Buildings and other constructions |
Investment properties in progress |
Total | |||||
| Investment properties | ||||||||
| Opening balance | 2,882,477 | 11,824,326 | - | 14,706,803 | ||||
| Disposals | (43,658) | (341,601) | - | (385,259) | ||||
| Transfers and write-offs | 300,837 | 1,315,536 | - | 1,616,373 | ||||
| Closing balance | 3,139,657 | 12,798,261 | - | 15,937,917 | ||||
| Accumulated depreciation | ||||||||
| Opening balance | 166,541 | 7,282,857 | - | 7,449,397 | ||||
| Depreciation for the period | - | 114,410 | - | 114,410 | ||||
| Disposals | (2,315) | (185,167) | - | (187,482) | ||||
| Transfers and write-offs | 34,103 | 655,979 | - | 690,082 | ||||
| Closing balance | 198,329 | 7,868,079 | - | 8,066,407 | ||||
| Accumulated impairment | ||||||||
| Opening balance | - | 1,092,556 | - | 1,092,556 | ||||
| Transfers/Adjustments | - | 597,703 | - | 597,703 | ||||
| Closing balance | - | 1,690,259 | - | 1,690,259 | ||||
| Net Investment properties | 2,941,328 | 3,239,923 | - | 6,181,251 |
| 31.12.2017 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Land and natural resources |
Buildings and other constructions |
Investment properties in progress |
Total | |||||
| Investment properties | ||||||||
| Opening balance | 3,921,049 | 18,372,780 | - | 22,293,828 | ||||
| Additions | - | - | 43,152 | 43,152 | ||||
| Disposals | (1,038,572) | (6,591,606) | - | (7,630,178) | ||||
| Transfers and write-offs | - | 43,152 | (43,152) | - | ||||
| Closing balance | 2,882,477 | 11,824,326 | - | 14,706,803 | ||||
| Accumulated depreciation | ||||||||
| Opening balance | 210,097 | 11,500,249 | - | 11,710,347 | ||||
| Depreciation for the period | - | 242,117 | - | 242,117 | ||||
| Disposals | (43,557) | (4,459,510) | - | (4,503,066) | ||||
| Closing balance | 166,541 | 7,282,857 | - | 7,449,397 | ||||
| Accumulated impairment | ||||||||
| Opening balance | - | 1,291,498 | - | 1,291,498 | ||||
| Transfers/Adjustments | - | (198,942) | - | (198,942) | ||||
| Closing balance | - | 1,092,556 | - | 1,092,556 | ||||
| Net Investment properties | 2,715,936 | 3,448,913 | - | 6,164,849 |
These assets are not allocated to the Group's operating activities, nor have a specific future use.
During the six-month period ended 30 June 2018, the amount of disposals relates to the sale of one property, having the corresponding gains, of 10 thousand Euros, been recorded in the caption Other operating income.
During the year ended 31 December 2017, the amount of disposals relates to the sale of ten properties, having the corresponding gains, of 1.1 million Euros, been recorded in the caption Other operating income.
Depreciation for the period, of 114,410 Euros (159,781 Euros as at30 June 2017), was recorded in the caption Depreciation / amortisation and impairment of investments, net.
As at 30 June 2018 and 31 December 2017, the parent company, CTT - Correios de Portugal, S.A. and the following subsidiaries in which it holds control were included in the consolidation:
| 30.06.2018 | 31.12.2017 | |||||||
|---|---|---|---|---|---|---|---|---|
| Percentage of ownership | Percentage of ownership | |||||||
| Company name | Place of business | Head office | Direct | Indirect | Total | Direct | Indirect | Total |
| Parent company: CTT - Correios de Portugal, S.A. |
Portugal | Av. D. João II N.º 13 1999-001 Lisboa |
- | - | - | - | - | - |
| Subsidiaries: | ||||||||
| CTT Expresso - Serviços Postais e Logística, S.A. ("CTT Expresso") |
Portugal | Lugar do Quintanilho 2664-500 São Julião do Tojal |
100 | - | 100 | 100 | - | 100 |
| Payshop Portugal, S.A. ("Payshop") |
Portugal | Av. D. João II N.º 13 1999-001 Lisboa |
- | 100 | 100 | 100 | - | 100 |
| CTT Contacto, S.A. ("CTT Con") |
Portugal | Av. D. João II N.º 13 1999-001 Lisboa |
100 | - | 100 | 100 | - | 100 |
| Mailtec Comunicação , S.A. ("Mailtec TI") |
Portugal | Av. D. João II N.º 13 1999-001 Lisboa |
100 | - | 100 | 100 | - | 100 |
| Tourline Express Mensajería, SLU. ("TourLine") |
Spain | Calle Pedrosa C, 38-40 Hospitalet de Llobregat (08908)- Barcelona - Spain |
100 | - | 100 | 100 | - | 100 |
| Correio Expresso de Moçambique, S.A. ("CORRE") |
Mozambique | Av. Zedequias Manganhela, 309 Maputo - Mozambique |
50 | - | 50 | 50 | - | 50 |
| Escrita Inteligente , S.A. ("RONL") |
Portugal | Av. D. João II N.º 13 1999-001 Lisboa |
100 | - | 100 | 100 | - | 100 |
| Banco CTT, S.A. ("BancoCTT") |
Portugal | Av. D. João II N.º 11 1999-001 Lisboa |
100 | - | 100 | 100 | - | 100 |
| Transporta - Transportes Porta a Porta, S.A. ("Transporta") |
Portugal | Estrada de São Marcos N.º 15 2735-521 Cacém |
100 | - | 100 | 100 | - | 100 |
On 4 January 2018, the share capital of Banco CTT was increase by 6,400,000 Euros through the transfer to Banco CTT of all the shares representing the share capital of Payshop (Portugal), S.A.. This transaction had no impact on the consolidated statements.
On 7 March 2018, a new share capital increase was made in Banco CTT in the amount of 25,000,000 Euros through the issue of new shares without nominal value and with the issuance value of 1 Euro each, currently totalling the amount of 156,400,000 Euros.
In June 2018, the subsidiaries Escrita Inteligente, S.A. and Transporta - Transportes Porta a Porta, S.A., underwent a share capital reduction operation, and the amounts of the reduction were transferred to retained earnings. The share capital of these companies, after the mentioned operation, is 37,374 Euros and 250,000 Euros, respectively.
There were also capital increase operations, recognised under the caption "Other Equity Instruments", in the subsidiaries Escrita Inteligente, S.A., Transporta - Transportes Porta a Porta, S.A. and Tourline Express Mensajería, SLU, for the amounts of 285,000 Euros, 3,000,000 Euros and 7,100,000 Euros, respectively.
On 4 May 2017, CTT – Correios de Portugal, S.A., acquired 100% of the share capital of the company Transporta – Transportes Porta a Porta, S.A. for the amount of 1,728,091 Euros.
As at 30 June2018 and 31 December 2017, the Group held the following interests in joint ventures, accounted for by the equity method:
| 30.06.2018 Percentage of ownership |
31.12.2017 Percentage of ownership |
|||||||
|---|---|---|---|---|---|---|---|---|
| Company name | Place of business | Head office | Direct | Indirect | Total | Direct | Indirect | Total |
| NewPost, ACE | Portugal | Av. Fontes Pereira de Melo, 40 Lisboa |
49 | - | 49 | 49 | - | 49 |
| PTP & F, ACE | Portugal | Estrada Casal do Canas Amadora |
- | 51 | 51 | - | 51 | 51 |
As at 30 June 2018 and 31 December 2017, the Group held the following interests in associated companies accounted for by the equity method:
| 30.06.2018 | 31.12.2017 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Percentage of ownership | Percentage of ownership | ||||||||
| Company name | Place of business | Head office | Direct | Indirect | Total | Direct | Indirect | Total | |
| Multicert - Serviços de Certificação Electrónica, S.A. ("Multicert") |
Portugal | R. do Centro Cultural, 2 Lisboa |
20 | - | 20 | 20 | - | 20 | |
| Mafelosa, SL (a) | Spain | Castellon - Spain | - | 25 | 25 | - | 25 | 25 | |
| Urpacksur, SL (a) | Spain | Málaga - Spain | - | 30 | 30 | - | 30 | 30 | |
(a) Company held by Tourline Mensajeria, SLU, which currently has no activity.
During the six-month period ended 30 June 2018, there were no changes in the consolidation perimeter.
During the year ended 31 December 2017, the consolidation perimeter was changed following the acquisition of the company Transporta – Transportes Porta a Porta, S.A. on 4 May 2017.
As at 30 June 2018, the caption Investment securities showed the following composition:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Non-current | ||
| Investment securities measured at Fair Value through Other Comprehensive Income (1) | ||
| Debt securities and other fixed-income securities | ||
| Public issuers | 552,650 | - |
| Other issuers | 1,089,338 | - |
| 1,641,988 | - | |
| Investment securities measured at amortised cost | ||
| Debt securities and other fixed-income securities | ||
| Public issuers | 349,887,107 | - |
| Other issuers | 30,230,311 | - |
| Impairment | (147,440) | - |
| 379,969,978 | - | |
| 381,611,966 | - | |
| Current | ||
| Investment securities measured at Fair Value through Other Comprehensive Income (1) | ||
| Debt securities and other fixed-income securities | ||
| Public issuers | 4,061 | - |
| Other issuers | 2,607,461 | - |
| 2,611,522 | - | |
| Investment securities measured at amortised cost | ||
| Debt securities and other fixed-income securities | ||
| Public issuers | 11,326,672 | - |
| Other issuers | 5,934,785 | - |
| Impairment | (5,722) | - |
| 17,255,735 | - | |
| 19,867,257 | - | |
| 401,479,223 | - | |
(1) As at 30 June 2018 includes the amount of 5,324 Euros regarding Accumulated impairment losses.
It should be noted that the Group adopted IFRS 9 in accordance with the modified retrospective approach, and therefore the amounts of the comparative period are not restated. Accordingly, the amounts currently shown in the caption Investment securities are shown under the headings Investments held to maturity and Financial assets available for sale.
As at 31 December 2017, the composition of the headings Investments held to maturity and Financial assets available for sale is as follows:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Non-current | ||
| Financial assets available for sale | ||
| Debt securities and other fixed-income securities | ||
| Public issuers | - | 562,115 |
| Other issuers | - | 2,613,065 |
| - | 3,175,180 | |
| Investments held to maturity | ||
| Debt securities and other fixed-income securities | ||
| Public issuers | - | 228,806,240 |
| Other issuers | - | 17,021,519 |
| - | 245,827,759 | |
| Current | ||
| Financial assets available for sale | ||
| Debt securities and other fixed-income securities | ||
| Public issuers | - | 13,765 |
| Other issuers | - | 2,562,429 |
| - | 2,576,194 | |
| Investments held to maturity | ||
| Debt securities and other fixed-income securities | ||
| Public issuers | - | 8,729,378 |
| Other issuers | - | 6,991,995 |
| - | 15,721,373 | |
| Financial assets available for sale | - | 5,751,374 |
| Investments held to maturity | - | 261,549,132 |
| - | 267,300,506 |
The analysis of the Investment securities measured at Fair Value through Other Comprehensive Income and the residual maturity of the investment securities as at 30 June 2018 is detailed as follows:
| 30.06.2018 | |||||
|---|---|---|---|---|---|
| Amortised cost | Fair value reserve | Total | |||
| Debt securities and other fixed-income securities | |||||
| Public-debt securities | |||||
| National | 530,950 | 25,761 | 556,711 | ||
| Foreign | - | - | - | ||
| Other issuers | |||||
| National | - | - | - | ||
| Foreign | 3,683,672 | 13,127 | 3,696,799 | ||
| 4,214,622 | 38,888 | 4,253,510 | |||
| 30.06.2018 | |||||||
|---|---|---|---|---|---|---|---|
| Current | Non-current | ||||||
| Due within 3 months |
Over 3 months and less than 1 year |
Total | Over 1 year and less than 3 years |
Over 3 years | Total | Total | |
| Investment securities measured at Fair Value through Other Comprehensive Income (1) | |||||||
| Debt securities and other fixed-income securities | |||||||
| Public-debt securities | |||||||
| National | 4,061 | - | 4,061 | 552,650 | - | 552,650 | 556,711 |
| Foreign | - | - | - | - | - | - | - |
| Other issuers | |||||||
| National | - | - | - | - | - | - | - |
| Foreign | 1,596,276 | 1,011,185 | 2,607,461 | 978,287 | 111,051 | 1,089,338 | 3,696,799 |
| 1,600,337 | 1,011,185 | 2,611,522 | 1,530,937 | 111,051 | 1,641,988 | 4,253,510 | |
| (1) As at 30 June 2018 includes the amount of 5,324 Euros regarding Accumulated impairment losses. |
| 30.06.2018 | |||||||
|---|---|---|---|---|---|---|---|
| Current | Non-current | ||||||
| Due within 3 months |
Over 3 months and less than 1 year |
Total | Over 1 year and less than 3 years |
Over 3 years | Total | Total | |
| Investment securities measured at amortised cost | |||||||
| Debt securities and other fixed-income securities | |||||||
| Public-debt securities | |||||||
| National | 3,973,779 | 6,665,778 | 10,639,557 | 15,820,179 | 214,084,002 | 229,904,182 | 240,543,739 |
| Foreign | 687,115 | - | 687,115 | 29,868,539 | 90,114,387 | 119,982,926 | 120,670,041 |
| Other issuers | |||||||
| National | 5,032,448 | 902,337 | 5,934,785 | 21,944,547 | 8,285,764 | 30,230,311 | 36,165,096 |
| Foreign | - | - | - | - | - | - | - |
| 9,693,342 | 7,568,115 | 17,261,457 | 67,633,265 | 312,484,153 | 380,117,418 | 397,378,875 |
Regarding 31 December 2017, the analysis of the Financial assets available for sale and the corresponding residual maturity as well as the analysis of the residual maturity of the investments held to maturity are detailed as follows:
| 31.12.2017 | ||||||
|---|---|---|---|---|---|---|
| Amortised cost | Fair value reserve | Total | ||||
| Debt securities and other fixed-income securities | ||||||
| Public-debt securities | ||||||
| National | 545,545 | 30,335 | 575,880 | |||
| Foreign | - | - | - | |||
| Other issuers | ||||||
| National | 250,002 | - | 250,002 | |||
| Foreign | 4,905,504 | 19,988 | 4,925,492 | |||
| 5,701,051 | 50,323 | 5,751,374 |
| 31.12.2017 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Current | Non-current | |||||||
| Due within 3 months |
Over 3 months and less than 1 year |
Total | Over 1 year and less than 3 years |
Over 3 years | Total | Total | ||
| Financial assets available for sale | ||||||||
| Debt securities and other fixed-income securities | ||||||||
| Public-debt securities | ||||||||
| National | 13,765 | - | 13,765 | - | 562,115 | 562,115 | 575,880 | |
| Foreign | - | - | - | - | - | - | - | |
| Other issuers | ||||||||
| National | 250,002 | - | 250,002 | - | - | - | 250,002 | |
| Foreign | 239,942 | 2,072,485 | 2,312,427 | 2,500,506 | 112,559 | 2,613,065 | 4,925,492 | |
| 503,709 | 2,072,485 | 2,576,194 | 2,500,506 | 674,674 | 3,175,180 | 5,751,374 |
| 31.12.2017 | |||||||
|---|---|---|---|---|---|---|---|
| Current | Non-current | ||||||
| Due within 3 months |
Over 3 months and less than 1 year |
Total | Over 1 year and less than 3 years |
Over 3 years | Total | Total | |
| Investments held to maturity | |||||||
| Debt securities and other fixed-income securities | |||||||
| Public-debt securities | |||||||
| National | 3,370,516 | 5,083,554 | 8,454,070 | 11,789,808 | 142,181,624 | 153,971,432 | 162,425,502 |
| Foreign | 275,308 | - | 275,308 | 20,888,425 | 53,946,383 | 74,834,808 | 75,110,116 |
| Other issuers | |||||||
| National | 1,683,085 | 5,308,910 | 6,991,995 | 14,603,866 | 2,417,653 | 17,021,519 | 24,013,514 |
| Foreign | - | - | - | - | - | - | - |
| 5,328,909 | 10,392,464 | 15,721,373 | 47,282,099 | 198,545,660 | 245,827,759 | 261,549,132 | |
| 30.06.2018 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Opening balance | Increases | Reversals | Utilisations | Changes in the accounting standards |
Closing balance | ||||
| Non-current assets Investment securities measured at Fair Value through Other Comprehensive Income |
- | 6 | (1,353) | - | 4,566 | 3,219 | |||
| Investment securities measured at amortised cost | - | 81,550 | (178,118) | - | 244,008 | 147,440 | |||
| - | 81,556 | (179,471) | - | 248,575 | 150,660 | ||||
| Current assets | |||||||||
| Investment securities measured at Fair Value through Other Comprehensive Income |
- | - | (4,016) | - | 6,120 | 2,104 | |||
| Investment securities measured at amortised cost | - | 2,658 | - | - | 3,064 | 5,722 | |||
| - | 2,658 | (4,016) | - | 9,184 | 7,826 | ||||
| Investment securities measured at Fair Value through Other Comprehensive Income |
- | 6 | (5,369) | - | 10,686 | 5,323 | |||
| Investment securities measured at amortised cost | - | 84,208 | (178,118) | - | 247,072 | 153,162 | |||
| - | 84,214 | (183,487) | - | 257,759 | 158,486 |
As at 30 June 2018 and 31 December 2017, the headings Other banking financial assets and Other banking financial liabilities showed the following composition:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Non-current assets | ||
| Investments in credit institutions | - | - |
| Loans to credit institutions | 17,102,890 | 11,831,122 |
| Impairment | (168,111) | - |
| 16,934,779 | 11,831,122 | |
| Current assets | ||
| Investments in credit institutions | 77,950,983 | 82,221,285 |
| Loans to credit institutions | 10,712,008 | 7,859,401 |
| Impairment | (308,872) | - |
| Other | 2,028,983 | 1,336,398 |
| 90,383,101 | 91,417,084 | |
| 107,317,880 | 103,248,206 | |
| Current liabilities | ||
| Other | 18,427,335 | 17,882,160 |
| 18,427,335 | 17,882,160 |
Regarding the captions Investments in credit institutions and Loans to credit institutions, the scheduling by maturity is as follows:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Up to 3 months From 3 to 6 months |
37,092,110 34,000,280 |
16,716,838 16,078,185 |
| From 6 to 12 months | 17,570,602 | 57,285,663 |
| From 1 to 3 years Over 3 years |
10,662,229 6,440,661 |
7,473,850 4,357,272 |
| 105,765,881 | 101,911,808 |
The impairment losses, for the six-month period ended 30 June 2018, are detailed as follows:
| 30.06.2018 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Opening balance | Increases | Reversals | Utilisations | Changes in the accounting standards |
Closing balance | |||
| Non-current assets | ||||||||
| Investments and loans in credit institutions | - | 252,873 | (201,055) | - | 116,293 | 168,111 | ||
| - | 252,873 | (201,055) | - | 116,293 | 168,111 | |||
| Current assets | ||||||||
| Investments and loans in credit institutions | - | - | (198,232) | - | 507,104 | 308,872 | ||
| - | - | (198,232) | - | 507,104 | 308,872 | |||
| - | 252,873 | (399,287) | - | 623,397 | 476,983 |
As at 30 June 2018 and 31 December 2017, the caption Credit to banking clients was detailed as follows:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Performing loans | 149,350,911 | 79,393,333 |
| Mortgage Loans | 131,925,256 | 66,145,178 |
| Overdrafts | 462,377 | 299,170 |
| Other credits | 16,963,278 | 12,948,985 |
| Overdue loans | 99,231 | 71,708 |
| 149,450,142 | 79,465,041 | |
| Credit risk impairment | (218,983) | (117,651) |
| 149,231,159 | 79,347,390 |
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Fixed rate | 561,608 | 370,878 |
| Floating rate | 148,888,534 | 79,094,163 |
| 149,450,142 | 79,465,041 | |
| Credit risk impairment | (218,983) | (117,651) |
| 149,231,159 | 79,347,390 |
The maturity analysis of the Credit to banking clients as at 30 June2018 and 31 December 2017 is detailed as follows:
| 30.06.2018 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Current | Non-current | |||||||
| In cash | Due within 3 months |
Over 3 months and less than 1 |
Total | Over 1 year and less than 3 years |
Over 3 years | Total | Total | |
| Mortgage loans | - | 971,494 | 2,779,255 | 3,750,749 | 7,533,706 | 120,640,801 | 128,174,507 | 131,925,256 |
| Overdrafts | 561,608 | - | - | 561,608 | - | - | - | 561,608 |
| Other credits | - | 16,963,278 | - | 16,963,278 | - | - | - | 16,963,278 |
| 561,608 | 17,934,772 | 2,779,255 | 21,275,635 | 7,533,706 | 120,640,801 | 128,174,507 | 149,450,142 | |
| 31.12.2017 | ||||||||
| Current | Non-current | |||||||
| Over 3 months | Total |
| In cash | Due within 3 months |
Over 3 months and less than 1 |
Total | Over 1 year and less than 3 years |
Over 3 years | Total | Total | |
|---|---|---|---|---|---|---|---|---|
| Mortgage loans | - | 465,590 | 1,357,066 | 1,822,656 | 3,680,670 | 60,641,852 | 64,322,522 | 66,145,178 |
| Overdrafts | 370,878 | - | - | 370,878 | - | - | - | 370,878 |
| Other credits | - | 12,948,985 | - | 12,948,985 | - | - | - | 12,948,985 |
| 370,878 | 13,414,575 | 1,357,066 | 15,142,519 | 3,680,670 | 60,641,852 | 64,322,522 | 79,465,041 |
During the six-month period ended 30 June 2018 and the year ended 31 December 2017, the movement in the Credit to banking clients impairment caption was as follows:
| 30.06.2018 | |||||||
|---|---|---|---|---|---|---|---|
| Opening balance | Increases | Reversals | Utilisations | Changes in the accounting standards |
Closing balance | ||
| Non-current assets | |||||||
| Credit to banking clients | 59,078 | 75,792 | (17,489) | - | (6,589) | 110,792 | |
| 59,078 | 75,792 | (17,489) | - | (6,589) | 110,792 | ||
| Current assets | |||||||
| Credit to banking clients | 58,573 | 45,742 | - | - | 3,876 | 108,191 | |
| 58,573 | 45,742 | - | - | 3,876 | 108,191 | ||
| 117,651 | 121,534 | (17,489) | - | (2,713) | 218,983 |
| 31.12.2017 | |||||
|---|---|---|---|---|---|
| Opening balance | Increases | Reversals | Utilisations | Closing balance | |
| Non-current assets | |||||
| Credit to banking clients | - | 62,628 | (3,550) | - | 59,078 |
| - | 62,628 | (3,550) | - | 59,078 | |
| Current assets | |||||
| Credit to banking clients | 417 | 70,950 | (12,794) | - | 58,573 |
| 417 | 70,950 | (12,794) | - | 58,573 | |
| 417 | 133,578 | (16,344) | - | 117,651 |
As at 30 June 2018 and 31 December 2017, the Deferrals included in Current assets and Current and Noncurrent liabilities showed the following composition:
| 30.06.2018 | 31.12.2017 | ||
|---|---|---|---|
| Assets deferrals Current |
|||
| Rents payable | 1,323,403 | 1,375,076 | |
| Meal allowances | 1,575,509 | 1,615,852 | |
| Other | 5,797,872 | 3,609,187 | |
| Diferimentos | 8,696,784 | 6,600,115 | |
| Liabilities deferrals | |||
| Non-current | |||
| Investment subsidy | 311,292 | 316,892 | |
| Diferimentos | 311,292 | 316,892 | |
| Current | |||
| Phone-ix top ups | 123,093 | 143,203 | |
| Investment subsidy | 14,250 | 17,299 | |
| Contratual liabilities | 1,334,247 | - | |
| Other | 827,452 | 1,272,194 | |
| Diferimentos | 2,299,042 | 1,432,696 | |
| 2,610,334 | 1,749,588 |
The caption "Contractual liabilities" results from the adoption, as at 1 January 2018, of IFRS 15 -Revenue from Contracts with Customers and stands for the amount already invoiced but not yet recognised as revenue because the performance obligations have not yet been met as recommended by the standard.
During the six-month period ended 30 June 2018 and the year ended 31 December 2017, the following movements occurred in impairment losses:
| 30.06.2018 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Opening balance | Increases | Reversals | Utilisations | Transfers | Changes in the consolidation perimeter |
Changes in the accounting standards |
Closing balance | |
| Non-current assets | ||||||||
| Tangible fixed assets | 49,340 | - | - | - | - | - | - | 49,340 |
| Investment properties | 1,092,556 | - | - | - | 597,703 | - | - | 1,690,259 |
| 1,141,896 | - | - | - | 597,703 | - | - | 1,739,599 | |
| Investment securities | - | 81,556 | (179,471) | - | - | - | 248,575 | 150,660 |
| Other non-current assets | 1,786,730 | - | - | - | 154,439 | - | - | 1,941,169 |
| Credit to banking clients | 59,078 | 75,792 | (17,489) | - | - | - | (6,589) | 110,792 |
| Other banking financial assets | - | 252,873 | (201,055) | - | - | - | 116,293 | 168,111 |
| TA105019 - Imparidade | 1,845,808 | 410,221 | (398,015) | - | 154,439 | - | 358,279 | 2,370,732 |
| 2,987,704 | 410,221 | (398,015) | - | 752,142 | - | 358,279 | 4,110,331 | |
| Current assets | ||||||||
| Accounts receivable | 32,583,555 | 749,002 | (214,363) | (178,810) | - | - | (883,882) | 32,055,502 |
| Credit to banking clients | 58,573 | 45,742 | - | - | - | - | 3,876 | 108,191 |
| Investment securities | - | 2,658 | (4,016) | - | - | - | 9,184 | 7,826 |
| Other current assets | 7,335,098 | 211,134 | (144,606) | (10,078) | (154,439) | - | - | 7,237,109 |
| Other banking financial assets | - | - | (198,232) | - | - | - | 507,104 | 308,872 |
| Slight and term deposits | - | 23,350 | (332,310) | 127 | - | - | 406,909 | 98,076 |
| 39,977,226 | 1,031,886 | (893,527) | (188,761) | (154,439) | - | 43,191 | 39,815,576 | |
| Merchandise | 1,719,745 | 186,572 | - | (39,390) | - | - | - | 1,866,927 |
| Raw, subsidiary and consumable | 658,137 | 20,115 | - | - | - | - | - | 678,252 |
| 2,377,882 | 206,687 | - | (39,390) | - | - | - | 2,545,179 | |
| 42,355,108 | 1,238,573 | (893,527) | (228,151) | (154,439) | - | 43,191 | 42,360,755 | |
| 45,342,812 | 1,648,794 | (1,291,542) | (228,151) | 597,703 | - | 401,470 | 46,471,086 |
| 31.12.2017 | |||||||
|---|---|---|---|---|---|---|---|
| Opening balance | Increases | Reversals | Utilisations | Transfers | Changes in the consolidation perimeter |
Closing balance | |
| Non-current assets | |||||||
| Tangible fixed assets | 173,055 | - | (123,714) | - | - | - | 49,341 |
| Investment properties | 1,291,498 | 49,208 | (248,150) | - | - | - | 1,092,556 |
| 1,464,553 | 49,208 | (371,864) | - | - | - | 1,141,897 | |
| Credit to banking clients | - | 62,628 | (3,550) | - | - | - | 59,078 |
| Other non-current assets TA105019 - Imparidade |
1,748,286 | 233,311 | - | (194,868) | - | - | 1,786,729 |
| 1,748,286 | 295,939 | (3,550) | (194,868) | - | - | 1,845,807 | |
| 3,212,839 | 345,147 | (375,414) | (194,868) | - | - | 2,987,704 | |
| Current assets | |||||||
| Accounts receivable | 30,309,524 | 2,358,555 | (1,302,268) | (1,060,347) | - | 2,278,091 | 32,583,555 |
| Credit to banking clients | 417 | 70,950 | (12,794) | - | - | - | 58,573 |
| Other current assets | 8,173,677 | 254,470 | (445,833) | (974,012) | - | 326,796 | 7,335,098 |
| 38,483,618 | 2,683,975 | (1,760,895) | (2,034,359) | - | 2,604,887 | 39,977,226 | |
| Merchandise | 1,565,187 | 236,253 | (455) | (81,240) | - | - | 1,719,745 |
| Raw, subsidiary and consumable | 579,327 | 78,810 | - | - | - | - | 658,137 |
| 2,144,514 | 315,063 | (455) | (81,240) | - | - | 2,377,882 | |
| 40,628,132 | 2,999,038 | (1,761,350) | (2,115,599) | - | 2,604,887 | 42,355,108 | |
| 43,840,971 | 3,344,185 | (2,136,764) | (2,310,467) | - | 2,604,887 | 45,342,812 |
In the year ended 31 December 2017, the caption Changes in the consolidation perimeter refers to the balances of Transporta as at the acquisition date.
The net amount between increases and reversals of impairment losses of inventories is recorded in the Consolidated income statement under the caption Cost of sales.
As at 30 June 2018, the Company's share capital was composed of 150,000,000 shares with the nominal value of 0.50 Euros each. The share capital is fully underwritten and paid-up.
As at 30 June 2018 and 31 December 2017 the Company's shareholders with greater than or equal to 2% shareholdings, according to the information reported, are as follows:
| 30.06.2018 | ||||
|---|---|---|---|---|
| Shareholder | No. of shares | % | Nominal value | |
| Gestmin SGPS, S.A. (1) | 18,589,534 | 12.393% | 9,294,767 | |
| Manuel Carlos de Melo Champalimaud | 284,885 | 0.190% | 142,443 | |
| Manuel Carlos de Melo Champalimaud (2) | Total | 18,874,419 | 12.583% | 9,437,210 |
| Global Portfolio Investments, S.L. (3) | 8,492,745 | 5.662% | 4,246,373 | |
| Indumenta Pueri, S.L. (3) | Total | 8,492,745 | 5.662% | 4,246,373 |
| Norges Bank | Total | 6,399,190 | 4.266% | 3,199,595 |
| Credit Suisse Group AG (4) | Total | 4,965,530 | 3.310% | 2,482,765 |
| BlackRock, Inc.(5) | Total | 3,880,684 | 2.587% | 1,940,342 |
| BBVA BOLSA FI (6) | 1,139,308 | 0.760% | 569,654 | |
| BBVA BOLSA EURO FI (6) | 674,991 | 0.450% | 337,496 | |
| BBVA BOLSA EUROPA FI (6) | 1,335,028 | 0.890% | 667,514 | |
| BBVA BOLSA PLUS FI (6) | 346,172 | 0.231% | 173,086 | |
| BBVA Asset Management, SA SGIIC (6) | Total | 3,495,499 | 2.330% | 1,747,750 |
| GreenWood Builders Fund I, LP (7) | Total | 3,478,370 | 2.319% | 1,739,185 |
| Wellington Management Group LLP (8) | Total | 3,105,222 | 2.070% | 1,552,611 |
| CTT, S.A. (own shares) (9) | Total | 1 | 0.000% | 0.50 |
| Other shareholders | Total | 97,308,340 | 64.872% | 48,654,170 |
| Total | 150,000,000 | 100.000% | 75,000,000 |
(1) Includes 18,465,215 shares directly held by Gestmin SGPS, S.A. and 124,319 shares held by members of its Board of Directors.
(2) Qualifying shareholding directly and indirectly attributable to Manuel Carlos de Melo Champalimaud.
| 31.12.2017 | |||||
|---|---|---|---|---|---|
| Shareholder | No. of shares | % | Nominal value | ||
| Gestmin SGPS, S.A. (1) | 16,733,301 | 11.156% | 8,366,651 | ||
| Manuel Carlos de Melo Champalimaud | 284,885 | 0.190% | 142,443 | ||
| Manuel Carlos de Melo Champalimaud (2) | Total | 17,018,186 | 11.345% | 8,509,093 | |
| Global Portfolio Investments, S.L. (3) | 8,492,745 | 5.662% | 4,246,373 | ||
| Indumenta Pueri, S.L. (3) | Total | 8,492,745 | 5.662% | 4,246,373 | |
| Credit Suisse Group AG (4) | Total | 4,965,530 | 3.310% | 2,482,765 | |
| Norges Bank | Total | 4,726,966 | 3.151% | 2,363,483 | |
| BNP Paribas Asset Management, S.A. (5) | Total | 4,646,344 | 3.098% | 2,323,172 | |
| Wellington Management Group LLP (6) | Total | 3,105,222 | 2.070% | 1,552,611 | |
| Kairos Partners SGR SpA (7) | Total | 3,075,000 | 2.050% | 1,537,500 | |
| CTT, S.A. (own shares) (8) | Total | 1 | 0.000% | 0.50 | |
| Other shareholders | Total | 103,970,006 | 69.313% | 51,985,003 | |
| Total | 150,000,000 | 100.000% | 75,000,000 |
94d17701a9f8/ficheiroPdf/Global%20Portfolio%2004Jan2018\_EN.pdf?byInode=true ) Wilmington Capital, S.L., a subsidiary of Indumenta Pueri, S.L. which held the qualifying holding in CTT, transferred all its CTT titles to a sister company controlled by Indumenta Pueri, S.L. –Global Portfolio Investments, S.L.
As at 30 June 2018 and 31 December 2017, the heading Reserves is detailed as follows:
| 30.06.2018 | ||||||
|---|---|---|---|---|---|---|
| Legal reserves | Own shares reserves | Fair Value reserves | Other reserves | Total | ||
| Opening balance | 15,000,000 | 8 | 50,323 | 64,897,551 | 79,947,883 | |
| Distribution of dividends (Note 16) | - | - | - | (15,372,222) | (15,372,222) | |
| Other movements | - | - | - | 1,282,861 | 1,282,861 | |
| Assets fair value | - | - | (11,436) | - | (11,436) | |
| Closing balance | 15,000,000 | 8 | 38,888 | 50,808,190 | 65,847,086 |
| 31.12.2017 | |||||||
|---|---|---|---|---|---|---|---|
| Legal reserves | Own shares reserves | Fair Value reserves | Other reserves | Total | |||
| Opening balance | 18,072,559 | 5,097,536 | 13,474 | 11,708,102 | 34,891,671 | ||
| Share capital decrease | - | - | - | 49,500,000 | 49,500,000 | ||
| Transfers | (3,072,559) | - | - | 3,072,559 | - | ||
| Own shares attribution | - | (5,097,527) | - | 5,097,527 | - | ||
| Assets fair value | - | - | 36,849 | - | 36,849 | ||
| Share Plan (attribution) | - | - | - | (4,480,638) | (4,480,638) | ||
| Closing balance | 15,000,000 | 8 | 50,323 | 64,897,551 | 79,947,883 | ||
The commercial legislation establishes that at least 5% of the annual net profit must be allocated to reinforce the legal reserve, until it represents at least 20% of the share capital. This reserve is not distributable except in the event of the liquidation of the Company but may be used to absorb losses after all the other reserves have been depleted or incorporated in the share capital.
Following the attribution of own shares to executive members of the Board of Directors within the scope of the remuneration policy established by the Remuneration Committee for the 2014-2016 term of office, in January 2017, the correspondent reserve was, reduced in the amount of 5,097,527 Euros.
As at 30 June 2018, this caption includes the amount of 8 Euros related to the creation of an unavailable reserve for the same amount of the acquisition price of the own shares held.
This heading records the profits transferred to reserves that are not imposed by the law or the articles of association, nor constituted pursuant to contracts signed by the Company.
During the six-month period ended 30 June 2018 and the year ended 31 December 2017, the following movements were made in the heading Retained earnings:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Opening balance | 34,268,089 | 93,589,211 |
| Application of the net profit of the prior year | 27,263,244 | 62,160,395 |
| Distribution of dividends (Note 16) | (41,627,778) | (72,000,000) |
| Share capital increase | - | (49,500,000) |
| Changes to accounting polices | (1,467,664) | - |
| Adjustments from the application of the equity method | (3,164) | 18,482 |
| Other movements | (1,282,861) | - |
| Closing balance | 17,149,866 | 34,268,089 |
The amount of 1,467,664 Euros relates to the effect of the adoption of IFRS 9 and IFRS 15, which is disclosed in more detail in note 3.
The Actuarial gains/losses associated to post-employment benefits, as well as the corresponding deferred taxes, are recognised in this heading.
Thus, for the six-month period ended 30 June 2018 and the year ended 31 December 2017, the movements occurred in this heading were as follows:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Opening balance | (32,634,996) | (27,137,824) |
| Actuarial gains/losses | - | (7,579,217) |
| Tax effect | - | 2,082,045 |
| Closing balance | (32,634,996) | (32,634,996) |
According to the dividends distribution proposal included in the 2017 Annual Report, at the General Meeting of Shareholders, which was held on 18 April 2018, a dividend distribution of 57,000,000 Euros regarding the financial year ended 31 December 2017 was proposed and approved, the amount of41,627,778 Euros from retained earnings and 15,372,222 Euros from reserves. The dividend amount assigned to own shares was transferred to Retained earnings, totalling 0.38 Euros.
At the General Meeting of Shareholders, which was held on 20 April 2017, a dividend distribution of 72,000,000 Euros was also approved, corresponding to a dividend per share of 0.48 Euros, regarding the financial year ended 31 December 2016. The dividend was paid on 19 May 2017. The dividend amount assigned to own shares was transferred to Retained earnings, totalling 0.48 Euros.
During the six-month periods ended 30 June 2018 and 30 June 2017, the earnings per share were calculated as follows:
| 30.06.2018 | 30.06.2017 | |
|---|---|---|
| Net income for the period | 6,250,289 | 17,745,100 |
| Average number of ordinary shares | 149,999,999 | 149,900,464 |
| Earnings per share | ||
| Basic | 0.04 | 0.12 |
| Diluted | 0.04 | 0.12 |
The average number of shares is detailed as follows:
| 30.06.2018 | 30.06.2017 | |
|---|---|---|
| Shares issued at begining of the period | 150,000,000 | 150,000,000 |
| Own shares effect | 1 | 99,536 |
| Average number of shares during the period | 149,999,999 | 149,900,464 |
The basic earnings per share are calculated dividing the net profit attributable to equity holders of the parent company by the average ordinary shares, excluding the average number of own shares held by the Group.
As at 30 June 2018, the number of own shares held by the Group is 1 and its average number for the period ended 30 June 2018 is also 1, reflecting the fact that no acquisitions or sales/attribution have occurred in the given period.
There are no dilutive factors of earnings per share.
For the six-month period ended 30 June 2018 and the year ended 31 December 2017, in order to face legal proceedings and other liabilities arising from past events, the Group recognised Provisions, which showed the following movement:
| 30.06.2018 | |||||||
|---|---|---|---|---|---|---|---|
| Opening balance | Increases | Reversals | Utilisations | Transfers | Changes in the consolidation perimeter |
Closing balance | |
| Non-current provisions | |||||||
| Litigations | 3,390,479 | 889,344 | (590,666) | (162,898) | 58,365 | - | 3,584,624 |
| Restructuring | 1,729,651 | - | - | (62,177) | (597,703) | - | 1,069,771 |
| Other provisions | 8,338,601 | 1,400,078 | (484,991) | (4,409) | (58,365) | - | 9,190,914 |
| Sub-total - caption "Provisions (increases)/reversals" | 13,458,730 | 2,289,422 | (1,075,657) | (229,483) | (597,703) | - | 13,845,309 |
| Restructuring | 11,903,172 | 9,363,516 | (134,866) | (18,402,351) | - | - | 2,729,471 |
| Other provisions | 666,430 | 316,802 | - | - | - | - | 983,232 |
| Provisões | 26,028,332 | 11,969,740 | (1,210,523) | (18,631,834) | (597,703) | - | 17,558,012 |
| 31.12.2017 | |||||||
| Opening balance | Increases | Reversals | Utilisations | Transfers | Changes in the consolidation perimeter |
Closing balance | |
| Non-current provisions | |||||||
| Litigations | 4,838,552 | 2,316,092 | (2,805,272) | (1,140,292) | 151,399 | 30,000 | 3,390,479 |
| Restructuring | - | 1,729,651 | - | - | - | - | 1,729,651 |
| Other provisions | 9,288,931 | 118,462 | (333,053) | (584,340) | (151,399) | - | 8,338,601 |
| Sub-total - caption "Provisions (increases)/reversals" | 14,127,483 | 4,164,205 | (3,138,325) | (1,724,632) | - | 30,000 | 13,458,730 |
| Restructuring | - | 13,101,590 | (146,221) | (1,052,197) | - | - | 11,903,172 |
| Other provisions | - | 666,430 | - | - | - | - | 666,430 |
| Provisões | 14,127,483 | 17,932,225 | (3,284,546) | (2,776,829) | - | 30,000 | 26,028,332 |
In the year ended 31 December 2017 the caption Changes in the consolidation perimeter refers to the balances of Transporta as at the acquisition date.
The net amount between increases and reversals of provisions was recorded in the consolidated income statement under the caption Provisions, net and amounted to (1,213,765) Euros (13,074 Euros as at 30 June 2017).
The provisions for litigations were set up to face the liabilities resulting from lawsuits brought against the Group and are estimated based on information from its lawyers.
On 19 December 2017, CTT approved an Operational Transformation Plan, which emphasises the purposes of optimising the retail network, reinforcing the HR optimisation programmeand reengineering the distribution network. As a result of this Transformation Plan, a provision for restructuring in the total amount of 13,571,359 Euros was recorded in the year ended 31 December 2017, having 11,841,708 Euros been recorded against the caption Staff costs and the amount of 1,729,651 Euros was recognised under the heading Provisions, net in the income statement.
Following the maintenance of the HR optimisation programmein 2018, reinforcements of this provision in the amount of 9,363,516 Euros were recorded against the caption Staff costs in the income statement. As at 30 June 2018 the provision amounts to 2,729,471 Euros. The utilisations recorded in the same period regard mainly the payment of indemnities foreseen when the provision was booked as well as the costs incurred with the closing of post offices.
For the six-month period ended 30 June 2018, the provision to cover contingencies relating to employment litigation actions not included in the current court proceedings and related to remuneration differences that can be claimed by workers, amounts to 7,440,682 Euros (7,882,083 Euros as at 31 December 2017).
On 30 June2018, a provision was recognised in Tourline to face the notification issued by the Spanish National Commission on Markets and Competition, which has now been the subject of an appeal to the Spanish Audiencia Nacional (National High Court). The amount provisioned, of 1,400,000 Euros, is the result of the evaluation carried out by its legal advisors.
As at 30 June 2018, in addition to the previously mentioned situations, this heading also includes:
As at 30 June 2018 and 31 December 2017, the Group had provided bank guarantees to third parties as follows:
| Description | 30.06.2018 | 31.12.2017 |
|---|---|---|
| Autoridade Tributária e Aduaneira (Portuguese Tax and Customs Authority) | 10,987,388 | 4,844,868 |
| FUNDO DE PENSÕES DO BANCO SANTANDER TOTTA (Pension Fund) | 3,030,174 | 3,030,174 |
| PLANINOVA - Soc. Imobiliária, S.A. (Real estate company) | 2,033,582 | 2,033,582 |
| LandSearch, Compra e Venda de Imóveis (Real estate company) | 1,792,886 | 1,792,886 |
| NOVIMOVESTE - Fundo de Investimento Imobiliário (Property fund) | 1,523,201 | 1,523,201 |
| LUSIMOVESTE - Fundo de Investimento Imobiliário (Property fund) | 1,274,355 | 1,274,355 |
| TIP - Transportes Intermodais do Porto, ACE (Oporto intermodal transport) | 150,000 | 150,000 |
| Courts | 112,888 | 126,204 |
| Municipalities | 96,665 | 188,491 |
| Solred (Repsol's fuel cards) | 80,000 | 80,000 |
| EPAL - Empresa Portuguesa de Águas Livres (Multi-municipal System of Water Supply and Sanitation of the Lisbon Area) | 68,895 | 21,433 |
| INCM - Imprensa Nacional da Casa da Moeda (Portuguese Mint and Official Printing Office) | 46,167 | 46,167 |
| Fonavi, Nave Hospitalet | 40,477 | 40,477 |
| ANA - Aeroportos de Portugal (Airports of Portugal) | 34,000 | 68,000 |
| EMEL, S.A. (Municipal company managing parking in Lisbon) | 26,984 | 26,984 |
| Águas do Norte (Water Supply of the Northern Region) | 23,804 | 23,804 |
| Serviços Intermunicipalizados Loures e Odivelas (Inter-municipal Services of Water Supply and Sanitation of the Loures and Odivelas Areas) | 17,000 | 17,000 |
| Direção Geral do Tesouro e Finanças (Directorate General of Treasury and Finance) | 16,867 | 16,867 |
| Portugal Telecom, S.A. (Telecommunication Company) | 16,658 | 16,658 |
| Refer (public service for the management of the national railway network infrastructure) | 16,460 | 16,460 |
| Instituto de Gestão Financeira Segurança Social (Social Security Financial Management Institute) | 16,406 | 16,406 |
| SMAS de Sintra (Services of Water Supply and Sanitation of the city of Sintra) | 15,889 | 15,889 |
| Repsol (Oil and Gas Company) | 15,000 | 15,000 |
| Administração Regional de Saúde - Lisboa e Vale do Tejo ( Regional Health Authority of the Lisbon Area) | 13,086 | 13,086 |
| Other entities | 12,603 | 14,103 |
| ACT Autoridade Condições Trabalho (Authority for Working Conditions) | 12,460 | 12,460 |
| Águas do Porto, E.M (Services of Water Supply and Sanitation of the city of Porto) | 10,720 | 10,720 |
| SMAS Torres Vedras (Services of Water Supply and Sanitation of the city of Torres Vedras) | 9,909 | 9,909 |
| Instituto de Segurança Social (Social Security Institute) | 8,190 | 8,190 |
| Promodois (Real estate company) | 6,273 | 6,273 |
| TNT Express Worldwide | 6,010 | 6,010 |
| Consejeria Salud ( Local Health Service/Spain) | 4,116 | 4,116 |
| Instituto do emprego e formação profissional (Employment and Professional Training Institute) | 3,718 | 3,718 |
| Casa Pia de Lisboa, I.P. (public institute for the promotion and protection of the children and youngsters' rights) | 1,863 | 1,863 |
| IFADAP (National Support Institute for Farming and Fishing) | 1,746 | 1,746 |
| Águas de Coimbra (Services of Water Supply and Sanitation of the city of Coimbra) | 870 | 870 |
| SPMS - Serviços Partilhados do Ministério da Saúde (Shared services of the Ministry of Health) | - | 30,180 |
| 21,527,309 | 15,508,150 |
According to the terms of some lease contracts of the buildings occupied by the Group's services, at the moment that the Portuguese State ceased to hold the majority of the share capital of CTT, bank guarantees on first demand had to be provided. These guarantees amount to 9,654,198 Euros as at 30 June 2018 and 31 December 2017.
The amounts relating to the Portuguese Tax and Customs Authority ("Autoridade Tributária e Aduaneira") arise essentially from tax enforcement proceedings arising from the inspection process regarding VAT of the fiscal years 2013, 2014 and 2015.
Following the risk assessment carried out by its legal advisors, the Group provided bank guarantees under the opposition presented in the arbitral tribunal, considering these proceedings as contingent liabilities.
As at 30 June 2018, the Group had subscribed promissory notes amounting to approximately 43.4 thousand Euros, for various credit institutions intended to secure complete and timely compliance with the corresponding financing contracts.
The Group assumed financial commitments (comfort letters) in the amount of 1,170,769 Euros for the subsidiary Tourline and regarding the subsidiary CORRE in the amount of 94,080 Euros, which are still active as at 30 June 2018.
In addition, the Group also assumed commitments relating to real estate rents under lease contracts and rents for operating and financial leases.
The contractual commitments related to Tangible fixed assets and Intangible assets are detailed respectively in Notes 5 and 6, respectively.
As at 30 June 2018 and 31 December 2017, the heading Accounts payable showed the following composition:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Current | ||
| Advances from customers | 3,002,447 | 2,989,508 |
| CNP money orders | 283,842,936 | 192,760,943 |
| Suppliers | 62,831,293 | 67,167,246 |
| Invoices pending confirmation | 9,679,779 | 10,783,684 |
| Fixed assets suppliers | 2,918,317 | 8,069,559 |
| Invoices pending confirmation (fixed assets) | 2,585,595 | 8,934,307 |
| Values collected on behalf of third parties | 10,357,688 | 10,307,613 |
| Postal financial services | 127,230,438 | 77,584,441 |
| Advances regarding disposals | 1,117,162 | 9,947 |
| Other accounts payable | 8,082,907 | 5,926,046 |
| 511,648,562 | 384,533,294 |
The value of CNP money orders refers to the money orders received from the National Pensions Centre (CNP), whose payment date to the corresponding pensioners must occur in the month after the closing of the period.
This heading records mainly the amounts collected related to taxes, insurance, savings certificates and other money orders.
The increase of this heading mainly regards the deposit stipulated in the agreement for the sale of the building located at Rua da Palma.
As at 30 June 2018 and 31 December 2017, the composition of the heading Banking clients' deposits and other loans is as follows:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Sight deposits | 523,776,180 | 408,639,274 |
| Term deposits | 114,660,457 | 129,945,220 |
| Savings deposits | 97,958,866 | 80,645,186 |
| 736,395,503 | 619,229,680 |
The above-mentioned amounts relate to Banco CTT clients' deposits. As at 30 June 2018 and 31 December 2017, the residual maturity of banking clients' deposits and other loans, is detailed as follows:
| 30.06.2018 | ||||||
|---|---|---|---|---|---|---|
| No defined maturity | Due within 3 months |
Over 3 months and less than 1 year |
Over 1 year and less than 3 years |
Over 3 years | Total | |
| Sight deposits | 523,776,180 | - | - | - | - | 523,776,180 |
| Term deposits | - | 54,383,224 | 60,277,233 | - | - | 114,660,457 |
| Savings deposits | 97,958,866 | - | - | - | - | 97,958,866 |
| 621,735,046 | 54,383,224 | 60,277,233 | - | - | 736,395,503 |
| 31.12.2017 | |||||||
|---|---|---|---|---|---|---|---|
| No defined maturity | Due within 3 months |
Over 3 months and less than 1 year |
Over 1 year and less than 3 years |
Over 3 years | Total | ||
| Sight deposits | 408,639,274 | - | - | - | - | 408,639,274 | |
| Term deposits | - | 63,510,961 | 66,434,259 | - | - | 129,945,220 | |
| Savings deposits | 80,645,186 | - | - | - | - | 80,645,186 | |
| 489,284,460 | 63,510,961 | 66,434,259 | - | - | 619,229,680 |
As at 30 June 2018 the caption reflects the estimated income tax regarding 2017, which has not yet been received, as well as the estimated income tax regarding the six-month period ended 30 June 2018.
During the six-month periods ended 30 June 2018 and 30 June 2017, the composition of the heading Other operating income was as follows:
| 30.06.2018 | 30.06.2017 | |
|---|---|---|
| Supplementary revenues | 2,195,447 | 2,211,602 |
| Early settlement discounts received | 32,898 | 32,475 |
| Gains inventories | 336 | - |
| Favourable exchange rate differences of assets and liabilities other than financing |
533,731 | 1,829,350 |
| Income from financial investments | 244,838 | 441,070 |
| Income from non-financial investments | 70,653 | 1,761,857 |
| Income from services and commissions | 2,151,994 | 2,270,582 |
| Interest income and expenses - financial services | 52,851 | 102,216 |
| VAT adjustments | 2,083,422 | 1,581,229 |
| Other | 794,645 | 255,890 |
| 8,160,815 | 10,486,271 |
The amount related to VAT adjustments mainly results from the improvements made in the procedures of the VAT deduction methodology.
The interest related to the Financial Services segment is recognised under this caption.
During the six-month periods ended 30 June 2018 and 30 June 2017, the composition of the heading Staff Costs was as follows:
| 30.06.2018 | 30.06.2017 | |
|---|---|---|
| Remuneration | 132,238,459 | 134,450,304 |
| Employee benefits | 2,126,067 | 2,266,612 |
| Indemnities | 13,603,073 | 2,672,975 |
| Social Security charges | 29,621,293 | 29,450,246 |
| Occupational accident and health insurance | 2,205,242 | 1,664,875 |
| Social welfare costs | 3,311,116 | 3,638,948 |
| Other staff costs | 46,494 | 77,488 |
| 183,151,744 | 174,221,448 |
In the six-month periods ended 30 June 2018 and 30 June 2017, the fixed and variable remunerations attributed to the members of the statutory bodies of CTT, S.A. were as follows:
| 30.06.2018 | |||||
|---|---|---|---|---|---|
| Board of Directors | Audit Comittee | Remuneration Board |
General Meeting of Shareholders |
Total | |
| Short-term remuneration | |||||
| Fixed remuneration | 1,096,839 | 80,143 | 27,900 | 14,000 | 1,218,882 |
| Annual variable remuneration | - | - | - | - | - |
| 1,096,839 | 80,143 | 27,900 | 14,000 | 1,218,882 | |
| Long-term remuneration | |||||
| Defined contribution plan RSP | 91,775 | - | - | - | 91,775 |
| Long-term variable remuneration - Share Plan | 20,070 | - | - | - | 20,070 |
| 111,845 | - | - | - | 111,845 | |
| 1,208,684 | 80,143 | 27,900 | 14,000 | 1,330,727 |
| 30.06.2017 | |||||
|---|---|---|---|---|---|
| Board of Directors | Audit Comittee | Remuneration Board |
General Meeting of Shareholders |
Total | |
| Short-term remuneration | |||||
| Fixed remuneration | 980,176 | 103,714 | 18,720 | 4,500 | 1,107,110 |
| Annual variable remuneration | 448,181 | - | - | - | 448,181 |
| 1,428,357 | 103,714 | 18,720 | 4,500 | 1,555,291 | |
| Long-term remuneration | |||||
| Defined contribution plan RSP | 96,389 | - | - | - | 96,389 |
| Long-term variable remuneration - Share Plan | 616,890 | - | - | - | 616,890 |
| 713,279 | - | - | - | 713,279 | |
| 2,141,636 | 103,714 | 18,720 | 4,500 | 2,268,570 |
Following the revision of the Remuneration Regulation for Members of the Statutory Bodies for the term of office 2017-2019, the terms of the Long-term Variable Remuneration were revised, with the payment being now made in cash, not in shares as in the previous plan. The plan is now considered as "cash settlement" which, according to IFRS2, implies that the liability should be annually updated and any changes resulting from the assessment should be recorded in the income statement.
The attribution and calculation of the Long-term Variable Remuneration are based on the results of the performance evaluation during the term of office (1 January 2017 to 31 December 2019), which consists of a comparison of the recorded performance of the Total Shareholder Return (TSR) of CTT shares and the TSR of a weighted peer group, composed of national and international companies.
The long-term variable remuneration attributed to the executive members of the Board of Directors will be paid at the end of the 2017-2019 term of office, and the amount of 20,070 Euros corresponds to the cost to be assumed in the period between 1 January 2018 and 30 June2018based on the assessment performed by an independent entity as at 31.12.2017.
For the six-month period ended 30 June 2018, and in accordance with the provisions of the Operational Transformation Plan, no estimate of Annual Variable Compensation was recorded for the members of the Statutory Bodies of CTT, S.A..
The change in the "Remuneration" caption arises essentially from the combined effect ofthe HR optimisation programme initiated in the previous year, the salary revision agreed with the workers' representative organisations, as well as the decision not to pay the variable remuneration related to 2017.
During the six-month period ended 30 June 2018, this caption includes the amount of 13.2 million Euros related to compensations established for termination of employment contracts by mutual agreement, a process initiated in 2018.
Social welfare costs relate almost entirely to health costs incurred by the Group with active workers, as well as expenses related to Health and Safety at Work.
During the six-month periods ended 30 June 2018 and 30 June 2017, the heading Staff costs includes the amounts of 292,906 Euros and 401,109 Euros, respectively, related to expenses with workers' representative bodies.
For the six-month periods ended 30 June 2018 and 30 June 2017, the average number of staff of the Group was 12,335 and 12,402, respectively.
Companies with head office in Portugal are subject to tax on their profit through Corporate Income Tax ("IRC") at the normal tax rate of 21%, whilst the municipal tax is established at a maximum rate of 1.5% of taxable profit, and State surcharge is 3% of taxable profit above 1,500,000 Euros and 5% of taxable profit above 7,500,000 Euros up to 35,000,000 Euros and 9% of the taxable profit above 35,000,000 Euros. Tourline is subject to income taxes in Spain, through income tax (Impuesto sobre Sociedades - "IS") at a rate of 25%, and the subsidiary CORRE is subject to corporate income tax in Mozambique ("IRPC") at a rate of 32%.
Corporate income tax is levied on the Group and its subsidiaries CTT – Expresso, S.A., Mailtec Comunicação, S.A., Payshop Portugal, S.A, CTT Contacto, S.A., Banco CTT, S.A. and Escrita Inteligente, S.A., through the Special Regime for the Taxation of Groups of Companies ("RETGS"). The remaining companies are taxed individually.
In the six-month periods ended 30 June 2018 and 30 June 2017, the reconciliation between the nominal rate and the effective income tax rate was as follows:
| 30.06.2018 | 30.06.2017 | |
|---|---|---|
| Earnings before taxes | 11,673,635 | 28,154,960 |
| Nominal tax rate | 21.0% | 21.0% |
| 2,451,463 | 5,912,542 | |
| Tax Benefits | (187,933) | (179,010) |
| Accounting capital gains/(losses) | (6,185) | (144,476) |
| Tax capital gains/(losses) | (4,127) | 73,646 |
| Impairment losses and reversals | 39,513 | (91,271) |
| Other situations, net | 1,119,968 | 858,306 |
| Adjustments related with - autonomous taxation | 265,681 | 792,586 |
| Adjustments related with - Municipal Surcharge | 206,016 | 553,056 |
| Adjustments related with - State Surcharge | 536,239 | 1,870,241 |
| Tax losses without deferred tax | 771,761 | 849,309 |
| Insuficiency / (Excess) estimated income tax | 203,579 | (35,114) |
| Income taxes for the period | 5,395,976 | 10,459,815 |
| Effective tax rate | 46.22% | 37.15% |
| Income taxes for the period | ||
| Current tax | 1,752,206 | 8,809,790 |
| Deferred tax | 3,440,190 | 1,685,139 |
| Insuficiency / (Excess) estimated income tax | 203,579 | (35,114) |
| 5,395,976 | 10,459,815 |
During the six-month period ended 30 June 2018, the heading Insufficiency/(Excess) estimated income tax mainly relates to the insufficiency of the income tax estimate of previous years in the net amount of 783,025 Euros and to the tax credit related to SIFIDE of 2016 in the amount of 444,943 Euros.
As at 30 June 2018 and 31 December 2017, the balance of deferred tax assets and liabilities was composed as follows:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Deferred tax assets | ||
| Employee benefits - healthcare | 71,219,110 | 71,544,019 |
| Employee benefits - pension plan | 77,580 | 80,044 |
| Employee benefits - other long-term benefits | 4,084,278 | 4,409,187 |
| Impairment losses and provisions | 3,926,832 | 6,753,261 |
| Tax losses carried forward | 961,445 | 688,388 |
| Impairment losses in tangible fixed assets | 421,963 | 257,614 |
| Long term variable remuneration | 16,962 | 11,308 |
| Land and buildings | 473,844 | 494,805 |
| Tangible assets' tax revaluation regime | 2,419,969 | 2,581,300 |
| Other | 538,408 | 335,813 |
| 84,140,391 | 87,155,739 | |
| Deferred tax liabilities | ||
| Revaluation of tangible fixed assets before IFRS | 2,490,738 | 2,591,593 |
| Suspended capital gains | 763,212 | 776,522 |
| Other | 31,006 | 31,006 |
| 3,284,956 | 3,399,121 |
As at 30 June 2018, the expected amount of deferred tax assets and liabilities to be settled within 12 months is 2.6 million Euros and 0.2 million Euros, respectively.
During the six-month period ended 30 June 2018 and the year ended 31 December 2017, the movements which occurred under the deferred tax headings were as follows:
| 30.06.2018 | 31.12.2017 | |
|---|---|---|
| Deferred tax assets | ||
| Opening balances | 87,155,739 | 86,220,762 |
| Effect on net profit | ||
| Employee benefits - healthcare | (324,909) | (1,061,122) |
| Employee benefits - pension plan | (2,464) | 80,044 |
| Employee benefits - other long-term benefits | (324,909) | (892,139) |
| Deferred accounting gains | - | (606,790) |
| Impairment losses and provisions | (2,805,196) | 3,722,704 |
| Tax losses carried forward | 273,057 | 361,204 |
| Impairment losses in tangible fixed assets | 164,349 | (102,719) |
| Long term variable remuneration | 5,654 | 11,364 |
| Share plan | - | (1,268,526) |
| Land and buildings | (20,961) | (1,365,661) |
| Tangible assets' tax revaluation regime | (161,331) | (86,657) |
| Other | (164,439) | 61,230 |
| Effect on equity | ||
| Employee benefits - healthcare | - | 2,082,045 |
| 345,801 | - | |
| Closing balance | 84,140,391 | 87,155,739 |
| 30.06.2018 | 31.12.2017 | |
| Deferred tax liabilities | ||
| Opening balances | 3,399,121 | 4,123,146 |
| Effect on net profit | ||
| Revaluation of tangible fixed assets before IFRS | (100,855) | (560,116) |
| Suspended capital gains | (13,310) | (158,299) |
| Other | - | (5,610) |
| Closing balance | 3,284,956 | 3,399,121 |
The tax losses carried forward are related to the losses of the subsidiaries Tourline, Escrita Inteligente and Transporta, and are detailed as follows:
| Company | Tax losses | Deferred tax assets |
|---|---|---|
| Tourline | 45,916,808 | - |
| Escrita Inteligente | 64,718 | 13,591 |
| Transporta | 4,513,590 | 947,854 |
| Total | 50,495,117 | 961,445 |
Regarding Tourline, the tax losses of the years 2008, 2009 and 2011 may be reported in the next 15 years, the tax losses related to 2012, 2013 and 2014 may be carried forward in the next 18 years and the tax losses of the years 2015, 2016 and 2017 have no time limit for deduction. As far as Escrita Inteligente is concerned, the tax losses related to the years 2015 and 2016 may be carried forward in the next 12 years and the tax losses of 2017 may be reported in the next 5 years. Regarding Transporta, the tax loss refers to the years 2017 and 2018 and may be carried forward in the next 5 years.
The sensitivity analysis performed allows us to conclude that a 1% reduction in the underlying rate of deferred tax would imply an increase in the income tax for the period of about 2.4 million Euros.
The Group policy for recognition of fiscal credits regarding SIFIDE is to recognise the credit at the moment of the effective receipt of the commission certification statement, certifying the eligibility of expenses presented in the applications for tax benefits.
Regarding the year ended 31 December 2015, for the expenses incurred with R&D of 3,358,151 Euros, the Group will have the possibility of benefiting from a tax deduction in corporate income tax estimated at 2,556,380 Euros. According to the notification dated 6 April 2017 of the Certification Commission, a tax credit of 1,079,209 Euros was attributed to CTT.
For the year ended 31 December 2016, regarding the expenses incurred with R&D of 1,895,281 Euros, the Group will have the possibility of benefiting from a tax deduction in corporate income tax estimated at 1,006,271 Euros. According to the notification dated 22 March 2018 of the Certification Commission, a tax credit of 444,943 Euros was attributed to the Group.
For the year ended 31 December 2017, regarding the expenses incurred with R&D of 1,432,825 Euros, the Group will have the possibility of benefiting from a tax deduction in corporate income tax estimated at 590,740 Euros
Pursuant to the legislation in force in Portugal, income tax returns are subject to review and correction by the tax authorities for a period of four years (five years for Social Security), except when there have been tax losses, tax benefits have been received, or when inspections, claims or challenges are in progress, in which cases, depending on the circumstances, these years are extended or suspended. Therefore, CTT's income tax returns from 2016 and onwards may still be reviewed and corrected, since the income tax returns prior to this date have already been inspected, even though the deadlines for the years 2014 and 2015 have not yet expired.
The Board of Directors of the Company believes that any corrections arising from reviews/inspections by the tax authorities of these income tax returns will not have a significant effect on the interim condensed consolidated financial statements as at 30 June 2018.
The Regulation on Assessment and Control of Transactions with CTT's Related Parties defines related party as a qualified shareholder, officer, or even a third party related by any commercial or relevant personal interest and subsidiaries or associates or jointly controlled entities (joint ventures).
According to the Regulation, the significant transactions with related parties must be previously approved by the Audit Committee of CTT as well as transactions that members of the Board of Directors of CTT and/or its subsidiaries conduct with CTT and/or its subsidiaries.
The other transactions with related parties are communicated to the Audit Committee for the purpose of subsequent examination.
During the six-month periods ended 30 June 2018 and 30 June 2017, the following transactions took place and the following balances existed with related parties:
| 30.06.2018 | ||||||
|---|---|---|---|---|---|---|
| Accounts receivable | Accounts payable | Revenues | Costs | Dividends | ||
| Shareholders | - | - | - | - | 57,000,000 | |
| Other shareholders of Group companies | ||||||
| Associated companies | 2,918 | 11 | 6,119 | 2,619 | - | |
| Jointly controlled | 166,616 | - | 204,685 | - | - | |
| Members of the | (Note 23) | |||||
| Board of Directors | - | - | - | 1,096,839 | - | |
| Audit Committee | - | - | - | 80,143 | - | |
| Remuneration Committee | - | - | - | 27,900 | - | |
| General Meeting | - | - | - | 14,000 | - | |
| 169,533 | 11 | 210,804 | 1,221,501 | 57,000,000 |
| 30.06.2017 | ||||||
|---|---|---|---|---|---|---|
| Accounts receivable | Accounts payable | Revenues | Costs | Dividends | ||
| Shareholders | - | - | - | - | 72,000,000 | |
| Other shareholders of Group companies | ||||||
| Associated companies | 2,247 | 25,281 | 6,110 | 34,391 | - | |
| Jointly controlled | 140,067 | - | 255,130 | 216 | - | |
| Members of the | (Note 23) | |||||
| Board of Directors | - | - | - | 1,428,357 | - | |
| Audit Committee | - | - | - | 103,714 | - | |
| Remuneration Committee | - | - | - | 18,720 | - | |
| General Meeting | - | - | - | 4,500 | - | |
| 142,315 | 25,281 | 261,240 | 1,589,899 | 72,000,000 |
The transactions and balances between subsidiaries are eliminated in the consolidation process and are not disclosed in this note.
In the daily operation of its business, CTT is regularly subject to inquiry from the supervisory entities for verification of compliance with current legislation and verification of procedures to ensure the provision of services. The Company adopts an attitude of collaboration by providing the necessary clarifications and due answer.
In this context, and following the statement of objections issued by the Competition Authority (AdC) in August 2016 on the basis of CTT's alleged set up of obstacles on the access to its postal network by its competitors, to which CTT reacted within the legal deadline, as well as the investigation carried out by said authority, CTT, with the objective of responding to the competition concerns expressed by the AdC, presented, on 22/12/2017, under the terms and for the purposes set forth in article 23 of Law no. 19/2012, of 8 May (Competition Law), a set of commitments that consist of the extension of the scope of the Offer of Access to the Postal Network (Offer of Access), made available to the competing postal operators, as follows:
the exception of the Domestic Base Service items weighing up to 50 g), whose mail is directly forwarded for delivery by the postmen through the Postal Delivery Offices;
After the public consultation, minor adjustments were introduced in the commitments submitted by CTT and on 05/07/2018 the AdC decided to accept the mentioned commitments, which CTT has to comply with immediately. On the same date, the AdC decided to close the proceeding against CTT.
The Spanish National Commission on Markets and Competition fined Tourline Express Mensajería, S.L.U. in the amount of 3,148,845 Euros (three million, one hundred and forty-eight thousand, eight hundred and fortyfive euros), for alleged cartel practice with ICS - International Courier Solution SL, in the courier market in Spain, between October 2013 and April 2016. As it considered the decision completely unfounded, Tourline has appealed to the Spanish Audiencia Nacional (National High Court). In this context, Tourline recognised a provision as referred in Note 18.
On 24 July 2018, through its subsidiary Banco CTT, S.A., CTT entered into an agreement for the acquisition of 321 Crédito, Instituição Financeira de Crédito, S.A., a fast-growing specialised consumer credit business, focused on lending for the purchase of used cars by retail clients through a wide network of car dealers, for the amount of €100m to be paid in cash at completion.
The final price is subject to a post-completion price adjustment mechanism to reflect variations in the regulatory capital of 321 Crédito from 31 December onwards.
The completion of the transaction is subject to the satisfaction of a set of conditions precedent, including inter alia the customary approvals from the competition and regulatory authorities.
THE DIRECTOR OF ACCOUNTING & TREASURY THE BOARD OF DIRECTORS
Avenida D. João II, n.º 13 1999-001 Lisboa PORTUGAL Telephone: +351 210 471 836 Fax: +351 210 471 994
Email: [email protected] CTT Line 707 26 26 26 Work days and Saturdays from 08:00 am till 10:00 pm
Guy Pacheco
Peter Tsvetkov Email: [email protected] Telephone: +351 210 471 087 Fax: +351 210 471 996
Brand and Communication Department Media Advisory Cátia Cruz Simões Email: [email protected] Telephone: +351 210 471 800
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