Consolidated Results

1st Quarter 2020

committed to deliver

1 * QUARTER 2020 CONSOLIDATEDRESULTS
1.
2. ОтнекНісніснісь
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CTT - Correios de Portugal, S.A. - Public Company 1 st QUARTER 2020 CONSOLIDATED RESULTS

Revenues affected by the outbreak of the COVID-19 pandemic. In the first two months of 2020, revenues were growing by 7.4%, including the inorganic effect of 321 Crédito, which illustrates the robust performance that the Company was achieving in its business lines until the acceleration of the effects of the pandemic. Notwithstanding, revenues increased to €179.9m (+€3.0m, +1.7%), with special emphasis on Banco CTT (+€10.5m, of which €8.0m from 321 Crédito), FinancialServices & Retail² (+€2.4m) and Express & Parcels (E&P) (+E0.6m), which offset the decrease in Mail & other2 (-€10.4m; of which -€8.7m in March, impacted by the pandemic).
EBITDA³ stood at € 20.2m, € 0.8m (-3.7% year-on-year) due to the significantimpact of COVID-19 in March, which reversed the high double-digit growth rate (+49.7%) in the first two months of 2020.
- EBIT grew to €9.3m, +€0.6m (+6.7%) vs. the 15 quarter of 2019. This evolution was due to the growth of Banco CTT (+€5.2m) and Financial Services & Retail² (+€2.6m) which offset the declines in Mail & other² (-€5.7m) and Express & Parcels (-€1.5m).
Free cash flow increased to €8.6m in 1Q20, doubling when compared to 1Q19 (+€4.3m).
-

Consolidated Results

			t. million
	1019	1020	٨%20/19
Revenues1	176.9	179.9	1.7%
Mail & other	120.6	110.7	-8.6%
Mail-	119.4	109.5	-8.3%
Central Structure	1.2	0.7	-42.7%
Express & Parcels	36.7	37.3	1.6%
Banco CTT	9.0	195	116.4%
Financial Services & Retail4	105	13.0	23.0%
Operating Costs3	155.9	159.7	2.4%
EBITDA3	21.0	20.2	-3.7%
Leases (IFRS16)	6.9	6.3	-8.9%
EBITDA including IFRS 16	28.0	26.6	-5.0%
Impairments & provisions	0.4	2.8	540.4%
Depreciation & amortisation	13.3	14.5	8.9%
Specific items	5.6	0.01	-99.7%
E31	8.7	9.3	6.7%
Financial results (+ / -)	-2.1	-3.1	-47.8%
Income tax for the period	2.9	2.5	-14.7%
Non-controlling interests	-0.008	0.03	>>
Net profit for the period4	3.7	3.7	-0.4%

¹ Excluding specificitems.

² In 2020 and in the same period of the previous year (proforma), the retail products and services unit are considered within the Financial Services & Retail business unit (former Financial Services business unit).

³ Excluding depreciation / amortisation, impairments and provisions, as well as the impact of IFRS 16 and specific items.

⁴ Attributable to equity holders.

1. Operational and Financial Performance

The COVID-19 pandemic affected consumers and companies and, although the Company has maintained its activity and has joined the "stay at home" movementfrom the various geographies where it operates by putting in motion several initiatives aimed at facilitating access of the Portuguese and Spanish populations to the services provided, the business in general was negatively influenced. The Mail business unit was very affected in the second half of March. The E&P business unit was also impacted, mainly in Spain, and several initiatives were launched in Portugal to help companies market their products. These initiatives, and the strong effort to capture volumes associated with e-commerce, were very successful and reversed the downward trend in B2B volumes in April. The Financial Services & Retail business area suffered the greatest impact, with a significantreduction in Public Debt Certificates subscriptions, as a result of the dependence on the retail channel, which suffered a decrease in demand as a result of restrictions on the movement of people and the opening hours of CTT post offices following the declaration of the state of emergency, although some progress was observed at the end of April. The impacts on the Banco CTT business area were not so significant in March and allowed the bank to present, for the first time in its history, a positive Net profit in the quarter.

Mail

At the end of 1Q20, Mail revenues reached €109.5m, -€9.9m (-8.3%) vis -à-vis 1Q19.

This decline resulted mostly from the combined effect of the fall in the revenues of transactional mail by €8.1m (-7.9%), advertising mailby €0.5m (-9.1%) andbusiness solutions by €0.3m (-10.6%).

In the first two months of 2020, the Mail revenues decline was just €1.5m (-1.9%) compared to the same period of the previous year, totaling € 77.4m. It was a consequence of the combined effect of a slight decrease in the revenues of transactional mail (-€1.6m;-2.4%), editorial mail (-€0.3m;-12.3%) and business solutions (-€0.4m; -17.6%), mitigated by the €0.5m (+16.0%) growth of advertising mail.

The revenues decline in the month of March amounted to €8.4m (-20.8%), as this crisishas had arelevant impact on virtually all transactional mail business lines, as for example, decline of ordinary mail by €2.0m (-13.9%), registered mail by €1.8m (-17.6%) and international mail by €2.3m (-29.9%), as well as a fall in advertising mail which posted a decrease of €1.0m (-44.7%).

During the first two months of 2020, the evolution of addressed mail volumes was within the Company guidance range [-6% to -8%] as it stood at -7.1%. However, the impact of the month of March 2020 on that metric was -20.9%, leading the 1Q20 evolution to -11.8%.

								million items
					2M19 2M20		1019	△%。
Transactional mail	96.3	88.5	-8.1%		46.3			142.6 126.2 -11.5%
Advertising mail	7.1	7.7	8.3%	6.0	3.4 -43.5%	13.1		11.1 -15.3%
Editorial mail	5.5		5.0 -10.5%	3.0	2.6 -12.4%	8.5		7.6 -11.2%
Addressed mail				109.0 101.2 -7.1%		43.7 -20.9% 164.2 144.9 -11.8%
Unaddressed mail			63.7 92.2 44.7% - 1			42.5 - 23.2 -45.5% 106.2 115.4 8.6%

Mail volumes

Until February, the evolution of transactional mail (-8.1%) continued to be negatively affected by the volumes decline of domestic ordinary mail which dropped by -8.2% (-9.5% in 2019), mainly in the banking and insurance, telecommunications and Government segments, as well as by the decines in priority mail (-39.8%) and registered mail (-3.7%). Green mail volumes grew (+84.7%), mainly due to product substitution, as the priority mail and registered mail prepaid products business line were discontinued.

In March, the transactional mail volumes evolution (-18.5%) was mostly the result of the lower demand for domestic ordinary mail (-1 4.5%), especially in the banking and insurance, telecommunications and Government sectors with declines above 20%, registered mail (-17.5%) as well as international mail, severely impacted by the restrictions on operations as a result of the COVID-19 pandemic. Outbound international mail posted a decline of 33.9% while inbound international mail, with a decrease of 44.5% in volumes, was most affected following the epidemic that started in China and gradually spread to other countries. Green mail volumes continued to grow (+57.1%).

The advertising mail business segment was negatively impacted in March, as the customers to postpone campaigns. This decline cancelled the good start to the year that had been observed until that point.

In the two months of 2020, addressed advertising mail volumes recorded an 8.3% growth, influenced by a campaign of a large client. In the month of March, the decline was 43.5%.

Also, regarding unaddressed advertising mail volumes, in the two months they continued to accelerate as they had since the 2™ quarter of 2019 and reached a 44.7% growth rate, mostly due to the capture of new customers. In parallel, several campaigns in the Government sectors were undertaken. Despite the sharp decline of March (-45.5%), this business line reached the end of 1 Q20 with an 8.6% growth.

In 1Q20, business solutions recorded revenues of €2.5m, -10.6% versus 1Q19. The dematerialization service reached a 25.8% growth provoked by the capture of new customers and the launch of the new business solution products & services portfolio (in the month of March they were already above 50k euros) which will be expanded throughout the next quarters as new solutions are put on the market. Despite this growth, there was a negative evolution in geographic solutions (-€0.2m), printing & finishing services (-€0.1m) and BPO - Business Process Outsourcing services (-€0.1m).

In 1Q20, the Philately revenues amounted to €1.3m, corresponding to a reduction of 7.2% versus 1Q19 (-€0.1m). The 3.6% growth in the international market should be noted, with online sales performing well when compared to the traditional external channels.

The average change in prices of the Universal Service in 1Q20 was 0.57% vs. the same period of the previous year.

Express & Parcels

The Express & Parcels revenues totaled €37.3m in 1020, +€0.6m (+1.6%) compared to the same period of 2019. In the first two months of 2020 they reached € 25.5m + € 0.8m (+3.0%) versus the same period of 2019. In March 2020, they amounted to €11.8m (-€0.2m;-1.4%) compared to the same period of the previous year.

In Portugal, revenues stood at €24.4m in 1Q20, +6.5% vs. the same period of 2019. In the first two months of 2020, they amounted to €16.4m, +6.8% vs. the same period of the previous year. In March 2020, they totaled €8.1m, +6.1% compared to the same period of 2019.

The business performance in Portugal in 1Q20 was mainly the result of the CEP (Courier, Express & Parcels) business that amounted to €18.9m (+10.4%) and the banking deliveries business that totaled €1.8m (+1.3%). The cargo business revenues stood at €2.8m (-11.5%) and those of the logistics business amounted to €0.7m (-5.2%).

The growth of the CEP revenues in Portugal was due to the capture of new customers in the 2019, with high levels of activity in the B2B segment and in e-commerce.

⁵ Including letter mail, editorial mail and parcels of the Universal Postal Service, excluding international inbound mail.

Volumes in Portugal in 1Q20 totaled 5.6 million items, +14.7% compared to the same period of 2019, the increase originated mostly in the abovementioned CEP customers.

The end of 1Q20 was marked by the effect of the COVID-19 pandemic which impacted the business due to the restrictive measures imposed to most of the sectors of the economy – closure of shops, services and industry, and contraction of consumption in some sectors due to the confinement. The beginning of the 200 arter showed a strong recovery in activity levels, albeit with diverse features as a significant increase in e-commerce.

CTT launched several initiatives, trying to leverage on solutions that could help bolster the recovery of the lost activity and create new growth opportunities, such as:

· the Lojas Online (Online Shops) service, an offer that allows SMEs to create online shops and facilitates the sale of their products. Atthe end of March, 519 online shops wereregistered, and the process of their creation had started, while 67 were active. Several protocols were signed with municipalities and business associations to accelerate the onboarding of more SMEs. There are currently 215 active shops, while circa 700 additional ones are being developed, covering various sectors of activity, with emphasis on food products, clothing and footwear.
· the service of home delivery of medical supplies in partnership with the National Association of Pharmacies, which allows the users to order medicines by e-mail or telephone directly to the participating pharmacies, while CTT ensures the next-day delivery. The number of deliveries has been increasing, currently being around 400 deliveries / day.
the expansion of the Expresso para Hoje (Express for Today) online service for urgent delivery of parcels, goods or documents within 2 hours. CTT launched a partnership with Uber as the service already existing in Lisbon, Porto and Braga was extended to various other cities – Aveiro, Coimbra, Évora, Funchal and cities in the Algarve.
· the offer of the first 3 months of warehousing for free of the existing CTT Logistica online service for logistic management of SMEs.

The Dottmarketplace, launched in May 2019 through a partnership between CTT and Sonae, already had, at the end of March 2020, 763 vendors present on the platform (an increase of 100 vs. the end of 2019) and more than 2.2 million products were available. At the end of February 2020, a total of 65k users were registered (+32% vs. the end of 2019) and at the end of March 2020 there were approximately 84k users registered (+69%), indicating strong growth and changes in consumption patterns favorable to the parcels business.

Revenues in Spain stood at €12.1m in 1Q20, -9.0% compared to the same period of 2019. Volumes totaled 4.1 million items, +0.3% vis-à-vis the same period of 2019. There was an increase in B2C volumes, items with lower weight and consequently lower price per item, and a decline in B2B volumes due to COVID-19.

lt should be noted that in the first two months of 2020, revenues amounted to€8.6m, -€0.5m (-5.2%) year-onyear, mostly due to the volumes decline of 5.6%, greatly influenced by the loss of a major client in April 2019. Excluding the impact of the lost volumes of that client, the revenues and volumes would have been +0.5% and +1.2%, respectively.

Themonth of March 2020 was strongly impacted by COVID-19, posting a-17.2% declinein revenues despite the 14.4% increase in volumes. This temporary commercial performance trendhas been reversed in April 2020 by a significant volumes growth as a result of business initiatives and changes in consumption patterns that have strongly stimulated the evolution of e-commerce purchases.

The rebranding to CTT Express, launched on 21 February 2020 promotes a greater Iberian alignment and a commitment to the urgent parcels market in this geography, which should allow the expansion of the business and a future presence with greater guarantees and stability for the regional partners of the franchisee network.

Revenues in Mozambique stood at €0.8m in 1Q20, +57.2% compared to the same period of the previous year. The CEP and the banking businesses positively contributed to this growth, underpinned by the capture of new businesses in the health area (collection of biological samples) in the 2019, and also in the continued growth of the banking sector.

Banco CTT

Banco CTT revenues more than doubled, reaching €19.5m in 1Q20, a year-on-year growth of €10.5m (+116.4%), of which £8.0m originated in 321 Crédito, acquired in May 2019. Excluding this inorqanic effect, the revenues would amount to €11.5m, still +€2.5m (+27.8%) vis-à-vis 1Q19.

The year-on-year revenues growth resulted from the positive performance of net interest income growth (+€1.6m; +63.5%) in the first three months of the year compared to the same period of 2019.

The commissions received from the banking activity grew by +€1.2m (+76.4%), boosted by customer transactionality (+35.6%, especially driven by debit cards and ATMs), consumer credit (+80.3%) and PPR -Retirement Savings Plan (+417.8%) with a growth in the placement of the PPR product of +€277.3m vs. 1Q19. The operating performance of Banco CTT until the end of 1 Q 20 led to growth:

i) in the credit to clients: the net mortgage loan portfolio stood at €442.4m (+58.5% vs. 1Q19 and +9.2% vs. December 2019); the specialized creditbusiness line amounted to €503.4m (+5.0% vs. December 2019); and the off-Balance sheet amount of consumer loans via the partnership with BNP Paribas Personal Finance (Cetelem), totaled €114.9m (+21.0% vs. 1Q19 and +2.6% vs. December 2019);
ii) in customer deposits to €1,382.8m (+50.0% vs. 1Q19 and +7.7% vs. year-end 2019) and in the number of accounts opened to 481k accounts (+101k vs. 1Q19 and +20k vs. year-end 2019). The placement of the PPR product (off-Balance sheet) totaled €380.1m (+269.7% vs. 1Q19 and +6.6% vs. December 2019).

The payments business line recorded a decrease of €0.3m (-6.2%) in commissions received in 1Q20 compared to the same period of the previous year, with total revenues of €4.6m. In 1Q20, the roll-out of the MBSPOT service to all agents continued.

The month of March shows minor impacts related to the restrictive measures imposed by the state of emergency, which are mostly visible in the demand for financial services, including transactions in the area of payments.

In 1Q20, Banco CTT announced the introduction of a debit card commissioning model in order to encourage its reqular use, to be applied on the anniversary date for customers already holding a card and for new customers after the end of February, given that customers who regularly use their debit card or customers under 25 years of age are exempt from commission. The collection of annuities began in April.

Financial Services & Retail

The Financial Services & Retail revenues amounted to €13.0m relative to Financial Services and €2.7m to Retail), with a growth of +€2.4m (+23.0%) compared to the same period of the previous year, as a result of the increase in subscriptions of Public Debt Certificates - Treasury Certificates Savings Growth in the months of January and February 2020.

In 1 Q20, the public debt certificates revenues totaled €8.4m, an increase of €2.6m (+44.3%) vs. 1 Q19.

In the first two months of the public debt certificates (Savings Certificates and Treasury Certificates Savings Growth) reached revenues of €6.6m (+66.4%) and subscriptions increased to €1,176m, +89.7% compared to the placements recorded in the same period of 2019.

The increase in subscriptions in the first two months of 2020 was due to the good performance in the recapture of the amounts of Public Debt Certificates (PDC) expired in January 2020 (circa €1,500m expired in PDC). However, this increase in subscriptions did not have an equal impact on the revenues, due to the reduction in the remuneration paid by IGCP - the Portuguese Treasury and Debt Management Agency to the Company as of 20 January 2020.

The subscriptions of the second half of the month of March 2020 were strongly influenced by the restrictive measures associated with the state of emergency, particularly the effect it generated on the preference for liquidity, reflecting a decline of -72.4% compared to the first half of the month, as the daily average went to €3.7 m compared to €13.4m in the first half of March 2020 and €14.1m in the month of March 2019, although a recovery in this activity is currently taking place.

Money orders stood at €1.5m, +€0.1m vs. 1Q19 (+8.1%), as the money order issuance service was used to pay unemployment and other social assistance benefits, from year-end 2019 onwards.

Conversely, CTT's payment services had a negative performance (mostly tax payments) that amounted to € 0.1m, -€ 0.02m (-11.3%) vs. 1Q19, mainly due to the structural effect of the changes in the means of payment for this type of service.

The retail products and services, with a -1.9% (-E0.1m) performance vs. 1Q19, also reversed in March the growth trend of the firsttwo months of 2020, when they posted a + 5.2% growth compared to the same period of 2019.

It was in third-party retail products and services, essentially in lottery, books, merchandising and ticket office sales, that the reduction in March was most felt, with an evolution of -€ 0.2m (-21.8%) compared to the month of March 2019, influenced by the restrictions associated with the state of emergency, which limited access to CTT's Retail Network, as the opening hours of the post offices changed, suspended the launch of new products by the suppliers while supplies had to be adjusted, and involved the cancellation and postponement of shows.

Operating Costs

Operating costs amounted to €159.7m, an increase of €3.8m (+2.4%) vs.1Q19, with an impact of +€3.0m from 321 Crédito. Excluding 321 Crédito, operating costs totaled €156.7m (+0.5%).

Operating Costs

				€ million
	1019	1020	<	A%
Operating costs	155.9	159.7	3.8	2.4%
Staff costs	85.9	88.3	2.3	2.7%
ESSS	63.2	64.7	1.5	2.4%
Other operating costs	6.7	6.7	-0.04	-0.6%

6 Excluding depreciation / amortisation, impairments and provisions, the impact of IFRS 16 and specific items.

Staff costs increased € 2.3m (+ 2.7%) in 1Q20. Excluding the effect of 321 Crédito, those costs would have grown €1.0m (+1.1%). This performance was mainly due to the reversal in the liability related to retired employees made in 1Q19, associated with a reduction of the mobile phones consumption average tariffs, which had at the time a positive one-time impact of +€0.9m.

External supplies & services costs increased by €1.5m (+2.4%), of which €1.1m resulted from the integration of 321 Crédito. Excluding the inorganic effect, the growth is only €0.4m (+0.6%) which includes mainly; (i) the increased direct costs (+€1.0m), mostly in the E&P business unit (last mile); (ii) the increase in costs related to temporary work (+€0.4m); and (iii) the reduction in general and administrative costs (-€1.4m),

Other operating costs were stable when compared to 1019. Excluding the inorganic effect of 321 Crédito (+€0.5m), these costs would have decreased by €0.5m (-7.7%) mostly due to: (i) the lower amount of indemnities paid for mail loss (-€ 0.3m); and (ii) the reduction of marketing and advertising costs (-€ 0.3m).

Staff

As at 31 March 2020, the CTT headcount (permanent and fixed-term staff) consisted of 12,010 employees, 65 less (-0.5%) than as at 31 March 2019. It is important to mention that as from 2020, the methodology to count permanent staff changed and permanent staff, which has an impact of -48 workers in the period under analysis, is no longer considered. Excluding this effect, the increase in permanent staff would have been 39. The integration of 321 Crédito had a specialimpact on the evolution of the number of permanent staff (+104),

		31.03.2019 31.03.2020	A 2020/2019
Mail & other	10.638	10.471	-167	-1.6%
Express & Parcels	1,125	1,088	-37	-3.3%
Banco CTT	273	411	138	50.5%
Financial Services & Retail	39	40	1	2.6%
Total, of which:	12,075	12.010	-65	-0.5%
Permanent	10.835	10.826	-9	-0.1%
Fixed-term contracts	1,240	1,184	-56	-4.5%
Portugal	11,622	11.532	-90	-0.8%
Other geographies	453	478	25	5.5%

Headcount7

There was a decrease in the number of staff (permanent and fixed-term staff) in the Mail & other (-167) and the Express & Parcels (-37) business units which more than offset the increase in Banco CTT (+138, of whom 125 resulting from the integration of 321 Crédito) and in the Financial Services & Retail (+1) business units.

Together, the areas of operations and distribution within the basic network (5,980 employees, of whom 4,378 delivery postmen and women) and the retail network (2,480 employees) represent circa 78% of CTT's permanent staff.

lt should be noted that these figures already include 4 exits in 2020, on top of 531 other exits, split into 161 in 2017, 268 in 2018 and 102 in 2019 which occurred in the context of the Human Resources Optimization Program within the Operational Transformation Planunderway.

^? In 2020 and in the same period of the previous year (products and services of the Mail & other business unit are considered within the Financial Services & Retail business unit (former Financial Services unit). This migration had animpact of workers between these businessunits.

EBITDA

In 1Q20 the Company generated an EBITDA® of €20.2m, -€0.8m (-3.7%) compared to 1Q19, with an EBITDA margin of 11.3% (11.9% in 1Q19). This performance was strongly influenced by the impacts occurred in March 2020, resulting from the restrictions related to the COVID-19 pandemic, given that EBITDA was growing in the first two months of 2020 (+€5.9m; +49.7%).

Specific Items

In 1 Q20 the Company recorded specific items for a net amount of € 0.01m, broken down as shown below:

				€ million
	1019	1020	<	A%
Specific items	5.6	0.01	-5.5	-99.7%
Corporate restructuring costs and strategic projects	5.5	0.4	-5.1	-93.3%
Other non-recurring revenues and costs	0.1	-0.4	-0.4	-672.0%

Specific Items

The decline of -€5.5m in Specific items is mostly related to corporate restructuring and strategic projects (-€5.1m), with special emphasis on of compensations paid for termination of employment contracts by mutual agreement (-€ 4.0m compared to 1019) within the Human Resources Optimization Program under the ongoing Operational Transformation Plan. The change in other non-recurringrevenues and costs (-E O.4m) is underpinned by the gain from the sale of a real estate property in 1Q20 (+£0.6m).

EBIT and Net Profit

EBIT stood at € 9.3m in 1Q20, + € 0.6m (+6.7%) vs. 1Q19, with a margin of 5.2% (4.9% in 1Q19).

This evolution was due to the organic and inorganic growth of Banco CTT (+€5.2m) and Financial Services & Retail (+€2.6m) which offset the decrease in Mail & other (-€5.7m) and Expresso & Parcels (+€1.5m).

				€ million
	1019	1020	ব	ΔΎρ
EBIT	8.7	ರಿ.3	0.6	6.7%
Mail & other	10.4	4 7	-5.7	-54.7%
Mail	23.6	20.0	-3.6	-15.1%
Central Structure	- 13.2	- 15.3	-2.1	-16.1%
Express & Parcels	- 2.3	- 3.8	-1.5	-66.8%
Banco CTT	-4.1	1.1	5.2	126.5%
Financial Services & Retail	4.7	7.2	2.6	54.9%

EBIT by business unit

In the first two months of 2020, EBIT was growing by €5.6m (+117.3%) as a result of the good performance of the Financial Services & Retail (+€2.7m) and Banco CTT (+€3.5m) business units.

⁸ Excluding depreciation / amortisation, impairments and provisions, the impact of IFRS 16 and specific items.

The consolidated financial results totaled -€3.1m, corresponding to a year-on-year decrease of £1.0m (-47.8%).

Financial Results

				€ million
	1019	1020	ব	A%
Financial results	-2.1	-3.1	-1.0	-47.8%
Financial income, net	-2.4	-2.5	-0.1	-6.3%
Financial costs and losses	-2.4	-2.5	-0.1	-5.5%
Financial income	0.02	0.003	-0.02	-85.8%
Gains / losses in subsidiaries, associated companies and joint ventures	0.3	-0.6	-0.8	-295.8%

Financial costs and losses incurred amounted to €2.5m, mainly incorporating financial to post-employment and long-term employee benefits of €1.1m, interest associated to finance leases liabilities linked to the implementation of IFRS 16 for an amount of €0.8m, and interest rates for an amount of €0.4m.

In 1Q20, CTT obtained a consolidated net profit attributable to the equity holders of €3.7m, in line (-0.4%) with that obtained in 1Q19 and positively impacted by the evolution of EBIT (+E0.6m) and the corporate income tax for the period (-€0.4m), which almost offset the evolution of the financial results (-€1.0m).

Investment

Capex stood at €5.6m, -12.0% (-€0.8m) compared to 1Q19, reflecting the continued implementation of the Modernization & Investment Plan (+€3.3m).

lt is important to note the increase in in expanding business units, e.g. Express & Parcels (+€0.6m) and Banco CTT (+€0.5m), in order to improve the activity support systems.

To be noted is also the update of the sorting machines in the Barcelona platform (+€0.6m) and the investment in protective gear (+€0.2m) installed in CTT post offices to tackle the COVID-19 pandemic.

Cash flow

In 1Q20, CTT generated an operating cash flow of €11.8m, an improvement of +€4.1m vs.1Q19.

			€ million
	1019	1Q20	△
EBITDA	21.0	20.2	-0.8
Specific items*	5.6	0.01	-5.5
CAPEX	6.3	5.6	-0.8
A Working capital	-1.4	-2.8	-1.5
Operating cash flow	7.8	11.8	4.1
Employee benefits	-3.4	-3.2	0.2
lax	-0.1	-0.05	0.02
Free cash flow	4.3	8.6	4.3
Debt (principal + interest)	3.7	-0.2	-3.9
Change in own cash	8.0	8.4	0.4
△ Liabilities related to Financial Services & Retail	-70.2	-216.7	-146.5
& Banco CTT, net10
A Other11	4.5	64.2	59.7
Net change in cash (balance sheet)	-57.7	-144.0	-86.3

Cash flow

*Specific items affecting EBITDA.

The negative evolution of the change in working capital vs. 1Q19 (-€1.5m) resulted mainly from the negative evolution of the investment (-€5.2m) following the high levels of investment of the year-end 2019, which was partly compensated by a positive evolution in working capital related to EBITDA net of specific items (+€3.7m),

The change in working capital in 1Q20 (-€2.8m) includes the negative impact of the change in items related to Capex (-€ 9.9m) and the positive impact of accounts receivable from general clients (+€ 4.7m) and from Postal Financial Services customers (+€3.2m).

Consolidated Balance Sheet

				€ million
	31.12.2019	31.03.2020	<	A%
Non-current assets	1.734.7	1,797.8	63.1	3.6%
Current assets	778.8	640.7	-138.1	-17.7%
Assets	2.513.4	2.438.5	-75.0	-3.0%
Equity	131.4	135.0	3.6	2.8%
Liabilities	2.382.0	2.303.4	-78.6	-3.3%
Non-current liabilities	512.8	500.5	-12.3	-2.4%
Current liabilities	1,869.2	1,802.9	-66.3	-3.5%
Equity and Liabilities	2,513.4	2,438.5	-75.0	-3.0%

⁹ The 1Q19 operating cash flow was restated to be comparable with that of 1Q20. In 2019 the methodology to calculate the operating cash flow was changed, in particular with respect to the capital, which no longer includes anon-cyclical value it mobility allowance.
10 The change in net libilities of Financial Services the evoluti

financial liabilities, net of the amounts in securities / banking financial assets, of entities of the CTT Group providing financial services, namely the financial services of CTT, Payshop, Banco CTT and 321 Crédito.

¹¹ The changein other cash items reflects the evolution of Bank of Portugal, outstanding cheques / clearing of Banco CTT cheques, and impairment of sight and term deposits and bank applications.

The key aspects of the comparison between the Balance Sheet as at 31.03.2020 and that as at 31.12.2019 are as follows:

· Assets decreased by € 75.0m, mostly due to the decrease in Cash & cash equivalents (-€144.0m) as a result of the decrease of the amounts of third parties in cash, partly offset by the credit to banking clients (+€ 61.3m), particularly mortgage loans.
Equity increased by €3.6m following the generation of net income attributable to the equity holders in 1Q20 for an amount of €3.7m.
Liabilities decreased by € 78.6m, with emphasis on the decrease of accounts payable (-€ 1.38.3m) as a direct consequence of the substantial reduction of Treasury Certificates subscriptions and he reduction of the amounts provided for the payment of CNP (National Pensions Centre) money orders, which was partly offset by the increase in banking clients' deposits and other loans (+€61.4m).

The CTT Group consolidated Balance Sheet excluding Banco CTT from the full consolidation perimeter and accounting it as a financial investment measured by the equity method would be as follows:

				t million
	31.12.2019	31.03.2020	<	^%
Non-current assets	6158	610.2	-5.7	-0.9%
Current assets	456.9	336.7	-120.3	-26.3%
Assets	1.072.8	946.8	-125.9	-11.7%
Equity	131.4	135.1	3.7	2.8%
Liabilities	941.3	811.7	-129.6	-13.8%
Non-current liabilities	432.0	427.4	-4.6	-1.1%
Current liabilities	509 3	384.3	-125.1	-24.6%
Equity and Liabilities	1.072.8	946.8	-125.9	-11.7%

Consolidated Balance Sheet excluding Banco CTT

As at 31 March 2020, the liabilities related to employee benefits (post-employment and long-term benefits) decreased to € 285.6m, - € 1.1m compared to December 2019, as specified in the table below:

Liabilities related to employee benefits

				€ million
	31.12.2019	31.03.2020	△	1%
Total liabilities	286.7	285.6	-1.1	-0.4%
Healthcare	274.4	274.0	-0.4	-0.1%
Healthcare (321 Crédito)	1.3	1.3	0.03	2.3%
Suspension agreements	3.1	2.5	-0.6	-20.0%
Other long-term employee benefits	7.1	7.0	-0.1	-1.1%
Other post-employment benefits	0.2	0.2	0.00	1.9%
Pension plan	0 4	0 4	-0.01	-1.4%
Other benefits	0.1	0.2	0.01	9.0%

Consolidated net debt

			€ million
		31.12.2019 31.03.2020	△
Net debt	60.0	50.7	-9.3
ST & LT debt	175.4	174.5	-0.9
Of which finance leases (IFRS 16)	84.0	82.8	-1.1
Own cash (I+II)	115.4	123.8	8.4
Cash & cash equivalents	443.0	299.0	-144.0
Cash & cash equivalents at the end of the period (I)	414.9	206.6	-208.3
Other cash items	28.1	92.4	64.2
Other Financial Services liabilities, net (II)	-299.5	-82.8	216.7

The key aspects of the comparison between the consolidated net debt as at 31.03.2020 and that as at 31.12.2019 are as follows:

· Own cash increased by €8.4m due to the improvement in operating cash flow (€11.8m) impacted by the reduction in payments of compensation for the termination of employment contracts by mutual agreement, partly offset by the payment of employee benefits in the amount of €3.2m.
Short-term & long-term debt decreased by €0.9m mainly due to the reduction of the liabilities from financial leases in the scope of IFRS 16 (-€1.1m).

CTT Group net debt excluding Banco CTT from the full consolidation perimeter and accounting it as a financial investment measured by the equity method would be as follows:

a finalla line man a comments mail to mail to a l
			€ million
	31.12.2019	31.03.2020	△
Net debt with Banco CTT under equity method	144.1	132.0	-12.1
ST & LT debt	173.2	172.1	-1.1
Of which Finance leases (IFRS 16)	81.8	80.4	-1.3
Own cash (I+II)	29.1	40.1	11.0
Cash & cash equivalents	268.2	147.8	-120.4
Cash & cash equivalents at the end of the period (I)	268.2	147.8	-120.4
Other cash items	-0.02	-0.02	0.00
Other Financial Services liabilities, net (II)	-239.1	-107.7	131.4

Consolidated net debt excluding Banco CTT

2. Other Highlights

CHANGES TO THE INFORMATION REPORTING STRUCTURE

As from 2020, the retail products revenues previously reported within the Mail & other business unit and the corresponding operating costs were migrated, along with their history, in order to reflect the changes made in the business organization, to the business unit previously named "Financial Services business unit", which has now been renamed "Financial Services & Retail business unit". This migration had an impact on the main business indicators of the two business units in 2019 as follows:

Mail & Other Business Unit

				t million
	2019	2019 Proforma	ব	4%19P/19
Revenues	490.9		477.6 -13.3	-2.7%
Operating costs	412.4		399.6 -12.8	-3.1%
EBITDA	78.5	78.0	-0.5	-0.6%
EBIT	43.4		42.9 -0.5	-1.1%

Financial Services & Retail Business Unit

				€ million
	2019	2019 Proforma	ব	Δ%19P/19
Revenues	34.1	47.4	13.3	39.2%
Operating costs	12.5	25.3	12.8	102.9%
EBITDA	21.6	22.1	0.5	2.3%
EBIT	21.0	21.5	0.5	2.3%

REGULATORY ISSUES

Under the Universal Postal Service Concession Contract, on 13.03.2020, CTT invoked force majeure before the Regulator, following the public health emergency of international scope, declared by the World Health Organization on 30.01.2020 and the subsequent classification of COVID-19 as a pandemic, on 11 March. In view of the seriousness and magnitude of the facts, which are public and notorious, and in order to comply with the public health instructions issued by the competent authorities, CTT could not fail to take the necessary and appropriate measures to protect workers and customers.

Pursuant to the provisions of the concession contract, CTT continues to ensure the functioning and continuity of postal services, taking the necessary and appropriate measures to the situation of force majeure, in terms of planning, operation prevention and human resources, submitting a daily update of the situation to the Government, as a counterparty, and to ANACOM, the regulatory authority responsible for overseeing the provision of the universal postal service.

DIVIDENDS / BONUS

In light of the economic uncertainty and the still unclear severity of the COVID-19 crisis, and despite the currently solid Balance Sheet of CTT, the Board of Directors deemed relevant, for the Company and all its stakeholders, to reverse its intention of proposing to the Shareholders General Meeting the distribution of €0.11 per share, previously disclosed to the market.

The Board of Directors proposed, and the Annual General Meeting approved, that the Net Profit of 2019 is allocated to Retained Earnings and, additionally, that no annual profit sharing is distributed to CTT's employees and executive members of the Board of Directors.

OUTLOOK FOR THE 2020 FINANCIAL YEAR

April 2020 showed encouraging signs of stabilization in some areas, although mail and financial services remain under significant pressure. The full impacts of Covid-19 on FY20 revenues & earnings guidance currently cannot be accurately and reliably quantified. CTT will provide an update on quidance as soon as it is possible to do so.

Final Note

This press release is based on CTT – Correios de Portugal, S.A. interim condensed consolidated financial statements for the 1st quarter of 2020, which are attached.

Lisbon, 6 May 2020

The Board of Directors

This information to the market and the general public is made under the terms and for the purposes of article 248 of the Portuguese Securities Code. It is also available on CTT's Investor Relations website at: https://www.ctt.pt/grupo-ctt/investidores/comunicados/index?language_id=1.

CTT - Correios de Portugal, S.A.

Guy Pacheco Market Relations Representative of CTT

Peter Tsvetkov Director of Investor Relations of CTT

Contacts:

Email: [email protected] Fax: + 351 210 471 996 Telephone: + 351 210 471 087

Disclaimer

This document has been prepared by CTT – Correios de Portugal, S.A. (the "Company" or "CTT") exclusively for communication of the financial results of the 18 quarter of 2020 and has a mere informative nature. This document does not constitute, nor must it be interpreted as, an offer to sell, issue, exchange or buy any financial instruments (namely any securities issued by CTT or by any of its subsidiaries or affiliates), nor any kind of solicitation, recommendation or advice to (di)invest by CTT, its subsidiaries or affiliates.

Distribution of this document in certain jurisdictions may be prohibited, and recipients into whose possession this document comes shallbe solely responsible for informing themselves about and observing any such restrictions. In particular, this press release and the information contained herein is not for publication or release in, or into, directly, the United States of America (including its territories and possessions), Canada, Japan or Australian or to any other jurisdiction where such an announcement would be unlawful.

Hence, neither this press release nor any part of it, norits distribution, constitute the basis of, or may be invoked in any context as, a contract, or compromise or decision of investment, in any jurisdiction. Thus being, the Company does not assume liability for this document if it is used with a purpose other than the above.

This document (i) may contain summarised information and be subject to amendments and (i) the information contained herein has neither been independently verified, nor audited or reviewed by any of the Company s advisors or auditors. Thus being, given the nature and purpose of the information herein and, except as required by applicable law, CTT does not undertake any oblicly update or revise any of the information contained in this document. This document does not contain all the information disclosed to the market about CTT, thus its recipients are invited and advised to consult the public information disclosed by CTT in www.cmvm.pt. In particular, the contents of this press release shall be read and understood information disclosed by CTT, through such means. By reading this document, you agree to be bound by the foregoing restrictions.

Forward-looking statements

This document contains forward-looking statements herein which are not historical facts, including, but not limited to, statements expressing our current opinion or, as applicable, those of our directors regarding the financial performance, the business strategy, the management plans and objectives concerning future operations and investments are forward-looking statements. Statements that include the words" expects", "foresees", "predicts", "intends", "plans", "believes", "anticipates", "wil", "targets", "may", "continues" and similar statements of a future or forward-looking nature identify forward-looking statements.

All forward-looking statements included herein involve known and uncertainties. Accordingly, there are or will be important factors that could cause our actual results, performance or achievements to differ materially from those indicated in these statements. Any forward-looking statements in this document reflect our current views with respect to future events and are subject to these and other isks, uncertainties and assumptions relating to the results of our operations, growth strategy and liquidity, and the wider environment (specifically, market developments, investment opportunities and regulatory conditions).

Although CTT believes that the assumptions beyond such forward-looking statements are reasonable when made, any third parties are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of CTT, what could cause the models, objectives, plans, estimates and / or projections to be materially reviewed and / or actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.

Forward-looking statements (in particular, the objectives, estimates and projections as well as the corresponding assumptions) do neither represent a commitment regarding the models and plans to be implemented, nor are they guarantees of future performance, nor have they been reviewed by the auditors of CTT. You are cautioned not o place undue reliance on the forward-looking statements herein.

All forward-looking statements included herein speak only as at the date of this document. Except as required by applicable law, CTT does not undertake any oblicly update or revise any forward-looking statements, whether as aresult of new information, future events or otherwise.

3 months report 2020

Interim condensed consolidated financial statements

I Insudit

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CTT-CORREIOS DE PORTUGAL, S.A.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019 AND 31 MARCH 2020 Euros

	NOTES	31.12.2019	Ullauulleu 31.03.2020

ASSETS Non-current assets
Tangible fixed assets	4	263,443,040	261,718,187
Investment properties	ട	7,653,000	7,588,618
Intangible assets	5	62,012,644	58,972,393
Goodwill		70,201,828	70,201,828
Investments in associated companies		293,434	293,434
Investments in joint ventures		2,723,803	2,165,843
Other investments		1,379,137	1,379,137
Debt securities	8	424,851,179	439,172,898
Other non-current assets		1,543,308	1,218,266
Credit to banking clients	10	792,469,611	849,419,916
Other banking financial assets	ರಿ	18,764,049	16,809,270
Deferred tax assets	25	89,329,806	88,828,741
Total non-current assets		1,734,664,839	1,797,768,532
Current assets
Inventories		5,860,069	5,873,596
Accounts receivable		146,471,712	140,531,520
Credit to banking clients	10	93,350,959	97,743,314
Deferrals	11	7,305,261	9,646,235
Debt securities	8	31,560,152	35,064,562
Other current assets		35,766,227	36,884,690
Other banking financial assets	9	14,660,286	15,179,044
Cash and cash equivalents	12	442,995,724	298,976,052
		777,970,390	639,899,013
Non-current assets held for sale		805,675	804,139
Total current assets		778,776,065	640,703,152
Total assets		2,513,440,904	2,438,471,684
EQUITY AND LIABILITIES Equity
Share capital	14	75,000,000	75,000,000
Own shares	15	(8)	(8)
Reserves	15	65,852,595	65,818,095
Retained earnings	15	10,867,301	40,016,638
Other changes in equity Net profit	15	(49,744,144) 29,196,933	(49,744,144) 3,681,542
Equity attributable to equity holders		131,172,677	134,772,123
Non-controlling interests		242,255	270,219
Total equity		131,414,932	135,042,342

Liabilities
Non-current liabilities
Medium and long term debt	18	148,597,934	146,027,123
Employee benefits	19	267,286,679	266,354,072
Provisions Deferrals	12	17,635,379	17,321,921
Other banking financial liabilites	ರಿ	294,490 76,060,295	291,690 67,595,563
Deferred tax liabilities	25	2,958,115	2,901,128
Total non-current liabilities		512,832,892	500,491,496

Current liabilities
Accounts payable	20	373,790,665	235,447,868
Banking clients' deposits and other loans	21	1,321,418,042	1,382,828,905
Employee benefits		19,416,212	19,293,270
Income taxes payable	22	5,958,753	7,977,252
Short term debt	18	26,813,567	28,475,288
Deferrals	11	3,454,477	3,236,745
Other current liabilities		100,353,646	105,038,692
Other banking financial liabilities	ರಿ	17,987,719	20,639,825
Total current liabilities Total liabilities		1,869,193,080	1,802,937,845
		2,382,025,972 2,513,440,904	2,303,429,342 2,438,471,684

The attached notes are an integral part of these financial statements.

CIT-CORREIOS DE PORTUGAL. S.A.

CONSOLIDATEDINCOME STATEMENT FOR THE THREE MONTH PERIODS ENDED 31 MARCH 2019 AND 31 MARCH 2020 Euros

	NOTES	Unaudited	Unaudited
		31.03.2019	31.03.2020
Sales and services rendered	3	170.151.984	163,393,029
Financial margin		2,500,370	10,425,575
Other operating income		4,209,138	6,090,843
		176,861,492	179.909.447
Cost of sales		(3,214,125)	(2,978,414)
External supplies and services		(57,729,948)	(58,580,593)
Staff costs	23	(89,936,755)	(88,318,919)
lmpairment of accounts receivable, net		(621,331)	(1,202,164)
Impairment of other financial banking assets		33.255	(620,097)
	19	146,799	(1,003,701)
Depreciation/amortisation and impairment of investments, net		(13,283,402)	(14,466,372)
Other operating costs		(3,601,311)	(4,050,554)
Gains/losses on disposal of assets		25,685	576,984
Provisions, net		(168,181,132)	(170,643,830)
		8,680,360	9,265,617

Interest expenses Interest income	24 24	(2,384,083)	(2,514,353)
Gains/losses in subsidiary, associated companies and joint ventures		22,169 284,961	3,143 (557,960)
		(2,076,953)	(3,069,170)
Earnings before taxes		6,603,407	6,196,447
Income tax for the period	25	(2,913,015)	(2,485,192)
Net profit for the period		3,690,392	3,711,255

Net profit for the period attributable to:
Equity holders Non-controlling interests		3,698,154 (7.761)	3,681,542 29.712
Earnings per share:	17	0.02	0.02

The attached notes are an integral part of these financial statements.

CIT-CORREIOS DE PORTUGAL, S.A.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE THREE MONTH PERIODS ENDED 31 MARCH 2020 Euros

	NOTES	Unaudited 31.03.2019	Unaudited 31.03.2020
Net profit for the period		3,690,392	3,711,254
Adjustments from application of the equity method (non re-classifiable adjustment to profit and loss)	15	742	(1,549)
Changes to fair value reserves	15	22,504	(34,501)
Other changes in equity		(149.650)	(47.795)
Other comprehensive income for the period after taxes		(126,404)	(83.845)
Comprehensive income for the period		3,563,989	3,627,409

Attributable to non-controlling interests		(7,019)	27,964
Attributable to shareholders of CTT		3.571.008	3.599.445

The attached notes are an integral part of these financial statements.

	Share capital		Reserves	Other changes in equity	Retained earnings		Non-controlling interests	Total
Restated balance on 31 December 2018	75.000.000	(8)	65.836.875	(30.993.430)	4.378.984	21.499.271	165.494	135.887.186
Appropriation of net profit restated for the vear of 2018					21.499.271	(21.499.271)
Dividends					(15.000.000)			(15,000,000)
				-	6.499.271	(21.499.271)		(15.000.000)
Other movements							(11.005)	(11.005)
Actuarial gains/losses - Health Care, net from deferred taxes				(18,750,714)				(18.750.714)
Changes to fair value reserves			15.720					15,720
Adjustments from the application of the equity method					(10,954)			(10.954)
Net profit for the period						29.196.933	87.767	29.284.700
Comprehensive income for the period			15.720	(18.750.714)	(10.954)	29.196.933	76,762	10.527.747
Balance on 31 December 2019	75.000.000	8)	65.852.595	(49.744.144)	10,867,301	29.196.933	242.255	131.414.932
Balance on 1 January 2020	75.000.000	(8)	65,852,595	(49.744.144)	10.867.301	29.196.933	242.255	131.414.932
Appropriation of net profit restated for the year of 2019					29.196.933	(29.196.933)
				-	29.196.933	(29.196.933)
Other movements					(46.047)		(1,748)	(47,795)
Actuarial gains/losses - Health Care, net from deferred taxes
Changes to fair value reserves			(34.501)					(34.501
Adiustments from the application of the equity method					(1,549)			(1.549)
Net profit for the period						3.681.542	29.712	3.711.254
Comprehensive income for the period			(34.501)		(47.596)	3.681.542	27.964	3.627.409
Balance on 31 March 2020 (Unaudited)	75,000,000	(8)	65.818.095	(49.744.144)	40,016,638	3.681.542	270,219	135,042,342

The attached notes are an integral part of these financial statements.

CTT-CORBEIOS DE PORTUGAL SA.
CONSOLIDATED STATEMENT OF CHANGESIN EQUITY AS AT 31 DECEMBER 2019 AND 31 MARCH 2020
Euros

CTT-CORREIOSDE PORTUGAL, S.A.
CONSOLIDATED CASHELOW STATEMENT FOR THE THREE MONTHPERIODSENDED 31 MARCH 2020
Euro

		Unaudited	Unaudited
	NOTES	31.03.2019	31.03.2020
Cash flow from operating activities
Collections from customers		164,458,282	170,876,488
Payments to suppliers		(71,875,389)	(75,017,977)
Payments to employees		(70,549,664)	(71,730,818)
Banking customer deposits and other loans		38,076,425	99,263,786
Credit to banking clients		(40,001,727)	(59,303,089)
Cash flow generated by operations		20,107,927	64,088,390
Payments/receivables of income taxes		(70,255)	(49,456)
Other receivables/ payments		(77,843,127)	(130,225,354)
Cash flow from operating activities (1)		(57,805,454)	(66,186,421)
Cash flow from investing activities
Receivables resulting from:
Tangible fixed assets			760,185
Investment properties		109,120
Debt securities	8	16,000,520	12,960,871
Other banking financial assets	9	25,715,000	3,365,000
Interest income		31,430	9,344
Payments resulting from:
Tangible fixed assets		(5,074,617)	(7,890,962)
Intangible assets		(5,419,991)	(4,880,088)
Debt securities	8	(21,888,615)	(29,021,384)
Demand deposits at Bank of Portugal		(2,964,613)	(63,507,823)
Other banking financial assets	9	(8,560,000)	(900,000)
Cash flow from investing activities (2)		(2,051,766)	(89,104,856)
Cash flow from financing activities
Receivables resulting from:
Loans obtained	18	7,433,813	5,804,019
Payments resulting from:
Loans repaid		(3,744,474)	(5,810,011)
Other credit institutions' deposits			(37,881,082)
Other banking financial liabilities	9		(8,531,092)
Interest expenses		(13,368)	(187,281)
Lease liabilities	18	(6,022,454)	(6,356,790)
Cash flow from financing activities (3)		(2,346,483)	(52,962,236)
Net change in cash and cash equivalents (1 + 2+ 3)		(62,203,704)	(208,253,513)
Cash and equivalents at the beginning of the period		414,846,614	414,865,569
Cash and cash equivalents at the end of the period	12	352,642,910	206,612,056

Cash and cash equivalents at the end of the period		352,642,910	206,612,056
Sight deposits at Bank of Portugal		9,182,031	89,431,857
Outstanding checks of Banco CTT / Checks clearing of Banco CTT		3,230,008	2,952,961
Impairment of slight and term deposits		(13,081)	(20,822)
Cash and cash equivalents (Balance sheet)		365,041,867	298,976,052

The attached notes are an integral part of these financial statements.

CTT - CORREIOS DE PORTUGAL, S.A.

Notes to the interim condensed consolidated financial statements (Amounts expressed in Euros)

1.	INTRODUCTION
2.	SIGNFICANT ACCOUNTING POLICIES
	2.1 Basis of presentation
3.	SEGMENT REPORTING
ব	TANGIBLE FIXED ASSETS
5.	INTANGIBLE ASSETS
6.	INVESTMENT PROPERTIES
7.	COMPANIES INCLUDED IN THE CONSOLIDATION
8.	DEBT SECURITIES
9.	OTHER BANKING FINANCIAL ASSETS AND LIABILITIES
10.	CREDIT TO BANKING CLIENTS
11.	DEFERRALS
12.	CASH AND CASH EQUIVALENTS
13.	ACCUMULATED IMPAIRMENT LOSSES
14.	EQUITY
15.	OWN SHARES, RESERVES, OTHER CHANGES IN EQUITY AND RETAINED EARNINGS
16.	DIVIDENDS
17.	EARNINGS PER SHARE
18.	DEBT
19.	PROVISIONS, GUARANTEES PROVIDED, CONTINGENT LIABILITIES AND COMMITMENTS
20.	ACCOUNTSPAYABLE
21.	BANKING CLIENTS DEPOSITS AND OTHER LOANS
22.	INCOME TAXES RECEIVABLE / PAYABLE
23.	STAFF COSTS
24.	INTEREST EXPENSES ANDINTERESTINCOME
25.	INCOME TAX FOR THE PERIOD
26.	RELATED PARTIES
27.	OTHER INFORMATION
28.	SUBSEQUENT EVENTS

Introduction 1.

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 Telefones" qovernment department and its legal form is the result of successive re-organizations 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 by private law, with the status of a stateowned 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 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 onward 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 the financial year ended 31 December 2013, CTT's capital was opened to the private sector. Supported by Decree-Lawno. 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 andRCM 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 1 % (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 holding 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 book building process. The Equity Offering was addressed exclusively to institutional investors

The shares of CTT are listed on Euronext Lisbon.

The financial statements attached herewith are expressed in Euros, as this is the functional currency of the Group.

These financial statements were approved by the Board of Directors and authorised for issue on 6 May 2020.

2. Significant accounting policies

The accounting policies adopted, including financial risk management policies, are consistent with the preparation of the consolidated financial statements for the year ended 31 December 2019.

2.1 Basis of presentation

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 2020, and in accordance with IAS 34 - Interim Financial Reporting.

u Segment reporting

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.

The Retail Products previously reported in the Mail segment and the respective operating costs, in order to reflect the changes made in the business organization, were migrated, along with their respective history, to the segment previously designated" Financial Services "and which now was renamed "Financial Services & Retail.

The period of 2019 was restated, for comparison purposes, according to the changes performed.

Therefore, the business of CTT is organised in the following segments:

· Mail CTT Contacto S.A. and CTT, S.A. excluding:
- ം
- The business of payments related collection of invoices and fines, Western Union transfers, integrated solutions and tolls - Bank.
· Express & Parcels includes CTT Expresso and CORRE;
Financial Services & Retail Postal Financial Services and the sale of products and services in the retail network of CTT, S.A;
· Bank Banco CTT, S.A., Payshop, 321 Crédito and CTT's payments bussiness (mentioned above).

The amounts reported in each business segment result from the agregation of the subsidiaries 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 companies' financial statements and related business units, adjusted by the elimination of transactions between companies of the same segment.

However, as CTT, S.A. has assets 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 internally set 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 corport areas (CTT Central Structure) previously unallocated, are allocated by nature to the Mail segment and others.

The consolidated income statement by nature and segment of the 1st quarter of 2019 and 2020 are as follows:

			Restated 31.03.2019
Thousand Euros	Mail	Express & Parcels	Financial Services & Retail	Bank	Total
Revenues	120,600	36,719	10,542	9,000	176,862
Sales and services rendered	118,511	36,497	10,268	4,877	170,152
Sales	1,824	198	1,918		3,940
Services rendered	116,687	36,298	8,350	4,877	166,212
Financial Marqin				2,500	2,500
Other operating income	2,089	222	275	1,623	4,209
Operating costs excluding depreciations, amortizations, impairment and provisions	100,637	37,589	5,562	12,062	155,851
Staff costs	75,608	5,976	350	4,013	85,948
External supplies and services	24,715	31,556	774	6,131	63,176
Other costs	3,141	712	1,732	1,143	6,728
Internal services rendered	(2,826)	(୧୮୮୮)	2,707	775
EBITDA	19,963	(870)	4,980	(3,062)	21,010
IFRS 16 (impact on EBITDA)	5,208	1.446	ട	289	6,948
EBITDA including IFRS 16	25,170	575	4,985	(2,773)	27,958
Impairment and provisions	67	(549)		41	(441)
Depreciation/amortisation and impairment of investments, net	(9,812)	(2,078)	(62)	(1,331)	(13,283)
Specific Items	(5,005)	(228)	(245)	(75)	(5,553)
EBIT	10,421	(2,280)	4.678	(4,138)	8.680
Financial results					(2,077)
Interest expenses					(2,384)
Interest income					22
Gains/losses in subsidiary, associated companies and joint ventures					285
Earnings before taxes (EBT)					6,603
Income tax for the period					(2,913)
Net profit for the period					3.690
Non-controlling interests					8
Faultrhalare of narant company					2600

			31.03.2020
Thousand Euros	Mail	Express & Parcels	Financial Services & Retail	Bank	Total
Revenues	110,170	37,300	12,966	19,474	179,909
Sales and services rendered	108,870	37,115	12,831	4,577	163,393
Soles	1,763	161	1,781		3,705
Services rendered	107,107	36.953	11.050	4,577	159,688
Financial Marqin				10,426	10,426
Other operating income	1,299	185	135	4,471	6,091
Operating costs excluding depreciations, amortizations, impairment and provisions	98,979	39,362	5,646	15,681	159,669
Staff costs	75,472	6,480	596	5,746	88,294
External supplies and services	23,695	32,862	693	7,438	64,688
Other costs	2,762	541	1,623	1,761	6,687
Internal services rendered	(2,950)	(520)	2,735	736
EBITDA	11,190	(2,062)	7,320	3,793	20,241
IFRS 16 (impact on EBITDA)	4,587	1.342	28	374	6,331
EBITDA including IFRS 16	15,777	(720)	7,348	4,167	26,572
Impairment and provisions	(349)	(887)		(1,590)	(2,826)
Depreciation / amortisation and impairment of investments, net	(10,739)	(2,158)	(100)	(1,470)	(14.465)
Specific Items	34	(38)	(0)	(10)	(14)
EBIT	4,723	(3,803)	7,248	1,097	9,266
Financial results					(3,069)
Interest expenses					(2,514)
Interest income					3
Gains/losses in subsidiary, associated companies and joint ventures					(558)
Earnings before taxes (EBT)					6,196
Income tax for the period					(2,485)
Net profit for the period					3,711
Non-controlling interests					(30)
Equity holders of parent company					3,682

The amount recorded as specific items amounts to -0.01 M€, highlighting the capital gains related to the sale of tangible fixed assets (0.6 M€) mainly compensated by works related to studies and advisory services for strategic projects, namely within the scope of the new Concession contract.

	Restated	31.03.2020
Thousand Euros	31.03.2019
Mail	120,600	110,170
Transactional mail	103,047	94,950
Editorial mail	3,684	3.279
Parcels (USO)	1,541	1.443
Advertising mail	5,597	5,087
Philately	1,403	1.301
Business Solutions	2,806	2.509
Other	2,522	1,600
Express & Parcels	36,719	37,300
Portugal	22,932	24,434
Parcels	17,126	18,912
Cargo	3.186	2.819
Banking network	1,592	1.771
Logistics	708	671
Other	320	261
Spain	13,306	12.111
Mozambique	480	755
Financial Services	10,542	12.966
Savings & Insurance	6.119	8.634
Money orders	1,382	1.494
Payments	159	141
Retail	2.706	2.654
Other	176	43
Bank	9,000	19,474
Net interest income	2,500	4,089
Interest income	2.669	4.354
Interest expense	(169)	(266)
Fees & commissions income	1.586	2.797
Own produts	1,073	1,715
Consumer credit & insurance	512	1,083
Payments & other	4.914	4,612
321 Crédito		7,976
	176,862	179.909

The assets by segment are detailed as follows:

	Restated 31.12.2019
Assets (Euros)	Mail	Express & Parcels	Financial Services & Retail	Bank	Non allocated assets	Total
Intaqible assets	20.426.590	5.514.463	200.198	27.682.577	8.188.816	62,012,644
Tanqible fixed assets	22,255,084	33,599,340	42.095	3,204,855	4,341,666	263,443,040
Investment properties					7,653,000	7,653,000
Goodwill	6.161.326	2.955.753		61.084.749		70,201,828
Deferred tax assets					89,329,806	89,329,806
Accounts receivable					146,471,712	146,471,712
Credit to bank clients				885,820,569		885,820,569
Debt securities				456,411,331		456,411,331
Other banking financial assets				33,424,335		33,424,335
Other assets					54,871,239	54,871,239
Cash and cash equivalents		5.403.455		174.819.282	262.772.987	442,995,724
Non-current assets held for sale				805,675		805,675
	248,843,001	47,473,011	242,294	1,643,253,372	573,629,227	2,513,440,904

1 100

	31.03.2020
Assets (Euros)	Mail	Express & Parcels	Financial Services & Retail	Bank	Non allocated assets	Total
Intagible assets	24.443.170	5.211.193	252.678	27.032.046	2.033.306	58.972.393
Tanqible fixed assets	220,968,447	33.140.342	56.977	3.391.403	4.161.019	261,718,187
Investment properties					7,588,618	7,588,618
Goodwill	6.161.326	2.955.753		61.084.749		70,201,828
Deferred tax assets					88,828,741	88,828,741
Accounts receivable					140,531,520	140,531,520
Credit to bank clients				947,163,230		947.163.230
Debt securities				474.237.460		474.237.460
Other banking financial assets				31,988,314		31,988,314
Other assets					57,461,201	57,461,201
Cash and cash equivalents		5.578.800		151.159.492	142.237.760	298.976.052
Non-current assets held for sale				804,139		804,139
	251,572,943	46,886,088	309,655	1,696,860,833	442,842,166	2,438,471,684

Debt by segment is detailed as follows:

Other information (Euros)	Restated 31.12.2019
	Mail	Express & Parcels	Financial Services & Retail	Bank	i otal
Non-current debt	127.309.217	19.770.671	30,858	1,487,187	148.597.934
Bank Ioans	81.702.538				81,702,538
Lease liabilities	45,606,680	19.770.671	30,858	1,487,187	66,895,396
Current debt	12,896,744	13,203,570	11,589	701.665	26,813,567
Bank loans		9.749.470			9.749.470
Lease liabilities	12.896.744	3.454.099	11,589	701,665	17.064.097
	140 205 961	27 974 741	47 447	2 1 88 857	175 411 501

	31.03.2020
Other information (Euros)	Mail	Express & Parcels	Financial Services & Retail	Bank	Total
Non-current debt	125.194.092	19,029,972	40,404	1,762,655	146.027,123
Bank loans	81.933.277				81.933.277
Lease liabilities	43.260.814	19,029,972	40,404	1,762,655	64,093,845
Current debt	14.778.155	13.047.486	17,251	632,396	28.475.288
Bank loans		9.743.479			9.743.479
Lease liabilities	14.778.155	3.304.007	17.251	632.396	18,731,809
	139.972.247	32.077.458	57,655	2,395,051	174.502.411

The Groupis domiciled in Portugal. The result of its Sales and services rendered by geographical segment is disclosed below:

Thousand Euros	31.03.2019	31.03.2020
Revenue - Portugal	143.518	138.225
Revenue - other countries	26.634	25.168
	170.152	163.393

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 to increase from one period to another.

4.

During the year ended 31 December 2019 and three-month period ended 31 March 2020, the movements occurred in Tangible fixed assets, as well as the respective accumulated depreciation, regarding the Group were as follows:

	31.12.2019
	resources	Land and natural Buildings and other constructions	Basic equipment	Transport equipment	Office equipment	assets	Other tangible fixed Tangible fixed assets Advance payments in progress	to suppliers	Rights of use	Total
Tangible fixed assets
Opening balance	35,591,993	334,565,087	143,060,832	3,597,961	63,825,994	26,571,051	2.409.296	174.162	217,781,407	827,577,785
Acquisitions		289.864	5,397,771	205,223	4,132,769	1,087,015	5,037,328	10.933.074		27,083,044
New contracts									6,995,186	6,995,186
Disposals	(11.962)	(302.339)	(1.085.186)	(828)	(10.822)					(1.411.137)
Transfers and write-offs		3,990,959	8,798,878	(199.167)	714,914	(14.188)	(3.990.959)	(8.693.236)	(1.023.301)	(416.100)
Terminated contracts									(47,988,327)	(47,988,327
Remeasurements									2.200.608	2.200.608
Adjustments		497	12.141	461	875	590			108.299	122.863
Changes in the consolidation perimeter		420,472			692,154	175.664			1,549,917	2,838,207
Othermovements						1,826,550	35,907			1,862,457
Closing balance	35,580,031	338,964,540	156.184.436	3,603,651	69,355,884	29,646,684	3,491,573	2.414.000	179.623.789	818,864,586
Accumulated depreciation
Opening balance	3,739,154	210.562.512	127.971.545	3,428,245	58.772.955	22.311.709			136,058,784	562.844.906
Depreciation for the period		9,445,914	5,641,044	56,981	2,342,240	1,803,688			21,631,653	40,921,520
Disposals	(1.747)	(192,958)	(1,022,632)	(828)	(14.649)					(1.232.814)
Transfers and write-offs			107,382	(128,381)	640,734	40.895			(858.850)	(198.220)
Terminated contracts									(47,988,327)	(47.988.327)
Adjustments		89	7.736	325	759	506				9,415
Changes in the consolidation perimeter		164,081			666,123	121,676			89.014	1,040,894
Closing balance	3,737,406	219,979,639	132,705,076	3,356,342	62,408,163	24,278,473			108,932,275	555,397,374
Accumulated impairment
Opening balance						24.255				24,255
Other variations						(83)				(83)
Closing balance						24,172				24,172
Net Tangible fixed assets	31,842,624	118.984.901	23.479.360	247,308	6.947.721	5.344.038	3.491.573	2.414.000	70.691.514	263,443,040

	31.03.2020
	resources	Land and natural Buildings and other constructions	Basic equipment	Transport equipment	Office equipment	Other tangible fixed assets	assets in progress	Tangible fixed Advance payments to suppliers	Rights of use	Tota
Tanqible fixed assets
Opening balance	35,580,031	338.964.540	156.184.436	3.603.651	69.355.884	29.646.684	3.491.573	2.414.000	179.623.789	818.864.586
Acquisitions		79.976	3.225.253	6.771	95.578	194.914	814,450	19.950		4.436.893
New contracts									792.973	792.973
Disposals	(8.099)	(149,792)	(2.238)		(2.542)					(162.671
Transfers and write=offs		106.000		(4.359)	(51.486)	(5.335.372)	(106.000)	(8.671)		(5,399,889)
Terminated contracts
Remeasurements									3.475.051	3.475.051
Adjustments		(1.424)	(52.416)	(2.130)	(24.937)	(8.907)				(89.813)
Closing balance	35,571,931	338,999,300	159.355.036	3.603.933	69.372.497	24,497,319	4,200,022	2.425.279	183,891,812	821.917.129
Accumulated depreciation
Opening balance	3.737.406	219.979.639	132.705.076	3.356.342	62,408,163	24.278.473			108.932.275	555,397,374
Depreciation for the period		2,373,923	1.613.366	14.921	630.656	292.394			5,328,933	10,254,193
Disposals	(460)	(95.058)	(2.238)		(2.542)					(100.297)
Transfers and write=offs				(4.359)	(9.021)	(5.332.123)				(5.345.504)
Terminated contracts
Adjustments		(339)	(25,851)	(1.006)	(2.153)	(1.648)				(30.996)
Closing balance	3.736.946	222.258.164	134.290.354	3,365,898	63.025.103	19.237.096			114.261.208	560.174.770
Accumulated impairment
Opening balance						24.172				24.172
Other variations	=							1	-
Closing balance						24.172				24.172
Net Tanqible fixed assets	31,834,985	116,741,135	25,064,682	238,035	6,347,393	5,236,051	4,200,022	2,425,279	69,630,604	261,718,187

The depreciation recorded in the Group amounting to 10,254,193 Euros on 31 March 2019), is booked under the heading Depreciation / amortisation and impairment of investments, net.

In the year ended 31 December 2019, the caption Changes in the consolidation perimeter in the Group, relates to the balances of the company 321 Crédito – Instituição Financeira de Crédito, S.A. acquired in May 2019.

In the Group as at 31 March 2020, Land and natural resources and Buildings and other constructions include 546,705 Euros (554,730 Euros as at 31 December 2019), related to land and property in co-ownership with MEO – Serviços de Comunicações e Multimédia, S.A..

According to the concession contractin force, at the end of the concession, the assets included in the public and private domain of the State revert automatically, at no cost, to the conceding entity. As the postal network belongs exclusively to CTT, not being a public domain asset, only the assets that belong to the State revert to it, and as such, at the concession CTT will continue to own its assets. The Board of Directors, supported on CTT's accounting records and the statement of Directorate General of Treasury and Finance ("Direção Geral do Tesouro e Finanças"), the entity responsible for the Information System of Public Buildings ("Sistema de Informação de Imóveis do Estado" – SIIE) believes that CTT's assets do not include any public or private domain assets of the Portuguese State.

As under the concession contract, the grantor does not control any significant residual interest in CTT's postal network and CTT being free to dispose of, replace or encumber the assets that integrate the postal network, IFRC 12 - Service Concession Agreements is not applicable to the universal postal service concession contract.

During the year ended 31 March 2020, the most significant movements in Tangible Fixed Assets were the following:

Buildings and other constructions:

The movements associated to acquisitions and transfers relate mostly to the capitalisation of repairs in own and third-party buildings of CTT.

Basic equipment:

The amount of acquisitions mainly relates to the acquisition of parcel sorting machines in the amount of 3,186 thousand Euros by CTT.

Other tangible fixed assets:

The amount of acquisitions mainly relates to prevention and safety equipment for approximately 186 thousand Euros by CTT.

Tangible fixed assets in progress:

The amounts under this heading are related to the capitalisation of improvements in own and third-party properties.

Rights of Use

Following the adoption of IFRS 16 the Group recognised rights of use, detailed by type of asset, as follows:

	31.12.2019
	Buildings	Vehicles	Other assets	Total
Tanqible fixed assets
Opening balance	187,977,519	28,092,244	1,711,643	217,781,407
New contracts	3,275,146	3,643,838	76.202	6,995,186
Transfers and write-offs	(1.004.078)	(19,223)		(1,023,301)
Terminated contracts	(36.450.459)	(11,252,228)	(285,640)	(47,988,327)
Remeasurements	2,200,608			2,200,608
Adjustments	24,605	56,854	26,839	108,299
Changes in the consolidation perimeter	1,419,084	130,833		1,549,917
Closing balance	157,442,425	20,652,319	1,529,045	179,623,789
Accumulated depreciation
Opening balance	123,639,470	11,900,424	518,891	136,058,784
Depreciation for the period	15.252.183	6.015.929	363.540	21.631.653
Transfers and write-offs	(855,861)	(2.989)		(858,850)
Terminated contracts	(36,450,459)	(11,252,228)	(285,640)	(47,988,327)
Adjustments	5	(5)
Changes in the consolidation perimeter	71,751	17,264		89,014
Closing balance	101,657,089	6,678,395	596,791	108,932,275
Net Tangible fixed assets	55.785.336	13,973,924	932.254	70.691.514

	31.03.2020
	Buildings	Vehicles	Other assets	Total
Tanqible fixed assets
Opening balance	157,442,425	20,652,319	1,529,045	179,623,789
New contracts	9.629	783.344		792,973
Remeasurements	3,475,051			3,475,051
Closing balance	160,927,104	21,435,663	1,529,045	183,891,812
Accumulated depreciation
Opening balance	101,657,089	6,678,395	596,791	108,932,275
Depreciation for the period	4,062,339	1.194.548	72.046	5,328,933
Transfers and write-offs
Terminated contracts
Closing balance	105,719,428	7,872,943	668,837	114,261,208
Net Tanqible fixed assets	55,207,676	13,562,720	860,208	69,630,604

The depreciation recorded, in the Group, in the amount of 5,328,933 Euros on 31 March 2019), is booked under the heading Depreciation / amortisation and impairment of investments, net.

Information on the liabilities associated with these leases as well as the interest expenses are disclosed on the notes 18 -Debt and Note 24 - Interest expenses and Interest income, respectively.

In the three-month period ended 31 March 2020, the Group entered into a sale & lease back agreement for the building held in Sintra. This operation met the requirements of IFRS 15 to be accounted for as a sale of the asset, having originated a capital gain in the amount of 590 thousand Euros, recognised in the caption "Gains / losses on disposal of assets", as well as the registration of a right of use in the amount of 9,629 Euros and a Lease liability of 117,353 Euros.

In the three-month period ended 31 March 2020, no interest on toans was capitalised, in the Group, as no loans were directly identified attributable to the acquisition of an asset that requires a substantial riod of time (greater than one year) to reach its status of use.

According to the analysis of impairment signs with reference to 31 March 2020, no events or circumstances were identified that indicate that the amount for which the Group's tangible fixed assets are recorded may not be recovered.

There are no tangible fixed assets with restricted ownership or any carrying value relative to any tangible fixed assets which have been given as a guarantee of liabilities.

The Group contractual commitments, related to Tangible fixed assets, are as follows:

	31.03.2020
lmprovements in properties	676,613
Trucks	294.676
DVE – Explosives Detector	31,882
	1.003.171

Intangible assets 5.

During the year ended 31 December 2019 and three-month period ended 31 March 2020, the movements which occurred in the main categories of the Group Intangible assets, as well as the respective accumulated amortisation, were as follows:

	31.12.2019
	Development projects	Computer Software		Industrial property Other intangible assets	Intanqible assets in progress	Advance payments to suppliers	Total
Intanqible assets
Opening balance	4,380,552	98,081,032	14,252,424	444,739	15,139,681		132,298,428
Acquisitions		1,106,752	2,365,069		14,817,787	69,072	18,358,681
Disposals	-
Transfers and write-offs		13,595,464	8,579		(14,331,297)	(69,072)	(796,326)
Adjustments		1,400	9,098				10,498
Changes in the consolidation perimeter		1,092,007	213,269		462,568		1,767,844
Closing balance	4,380,552	113,876,654	16,848,440	444,739	16,088,740		151,639,125
Accumulated amortisation
Opening balance	4,375,722	61,288,015	9,419,396	444,739			75,527,871
Amortisation for the period	1,272	12,754,618	782,218				13,538,108
Disposals
Transfers and write-offs		(730,878)	3,624				(727,254)
Adjustments		1,400	4,087				5,487
Changes in the consolidation perimeter		1,082,878	199,390				1,282,268
Closing balance	4,376,994	74,396,033	10,408,714	444,739			89,626,480
Net intangible assets	3,558	39,480,622	6,439,725		16,088,740	1	62,012,644

	31.03.2020
	Development projects	Computer Software		Industrial property Other intanqible assets	Intangible assets in progress	Advance payments to suppliers	Total
Intangible assets
Opening balance	4,380,552	113,876,654	16,848,440	444,739	16,088,740		151,639,125
Acquisitions		37,227			1,109,690		1,146,917
Disposals	-					-
Transfers and write-offs		8,367,387			(8,310,151)		57,237
Adjustments			(26,588)		(80,876)	1	(107,465)
Closing balance	4,380,552	122,281,268	16,821,851	444,739	8,807,402		152,735,813
Accumulated amortisation
Opening balance	4,376,994	74,396,033	10,408,714	444,739			89,626,480
Amortisation for the period	319	3,841,925	304,017				4,146,261
Disposals
Transfers and write-offs	-	3,180			1	1	3,180
Adjustments			(12,501)		-		(12,501)
Closing balance	4,377,313	78,241,138	10,700,230	444,739			93,763,420
Net intangible assets	3,239	44,040,131	6,121,621		8,807,402	-	58,972,393

The amortisation in the Group for the three-month period ended 31 March 2020, amounting to 4,146,261 Euros (3,067,388 Euros as at 31 March 2019) was recorded under Depreciation and impairment of investments, net.

In the year ended 31 December 2019, the caption Changes in the consolidation perimeter in the Group, relates to the balances of the company 321 Crédito - Instituição Financeira de Crédito, S.A. as at the acquisition date.

The caption Industrial property in the Group includes the license of the trademark "Payshop International" of CTT Contacto, S.A., in the amount of 1,200,000 Euros. This license has an indefinite useful life, therefore it is not amortised.

The transfers occurred in the year ended 31 December 2019 and the three-month period ended 31 March 2020, from Intangible assets in progress to Computer software refer to IT projects, which were completed during the referred periods.

The amounts of 273,007 Euros and 255,960 Euros were capitalised in computer software or in intangible assets in progress as at 31 December 2019 and 31 March 2020, respectively, related to Groupstaff costs incurred in the development of these projects.

As at 31 March 2020 the Group Intangible assets in progress, relate to IT projects which are under development, of which the most relevant are:

	Group
Accipiens software	1.060.420
Mortgage loans - software	673.632
AS/400 software	568.470
Data Governance - software	497.171
Transactions broker - software	479.467
SAP Hana & Hybris Billing	451.274
Management information - Software	451.040
Transaction Monitoring - software	450.140
Account Opening Process - software	354.627
Mailmanager - software	338,289
	5,324,529

The Group has not identified any relevant uncertainties regarding the conclusion of ongoing projects, nor about their recoverability. Even so, the recoverability of the values of intangible assets in progress was tested in the scope of impairment tests of the assets of the Cash Generating Unit to which they belong, performed with reference to 31 December 2019.

Most of the projects are expected to be completed in 2020.

The amount of research and development expenses incurred by the Group in 2019, in the amount of 1,063,800 Euros was disclosed in Note 25.

There are no intangible assets with restricted ownership or any carrying value relative to any intangible assets which have been given as a guarantee of liabilities.

In the three-month period ended 31 March 2020, no interest on loans were capitalised, in the Group, as no loans were directly identified attributable to the acquisition of an asset that requires a substantial period of time (greater than one year) to reach its status of use.

According to the analysis of impairment signs with reference to 31 March 2020, no events or circumstances were identified that indicate that the amount for which the Group's intangible assets are recorded may not be recovered.

Contractual commitments relative to the Group Intangible assets are as follows:

	31.03.2020

CBS - Core Banking System	1.200.000
Account Opening Process	485,000
Data Iqnition	365.000
Projeto X	302,000
Sharepoint Sunset	270.000
	2.622.000

6. Investment properties

As at 31 December 2019 and 31 March 2020, the Grouphas the following assets classified as investment properties:

	31 12 2019
	Land and natural resources	Buildings and other constructions	Total
Investment properties
Opening balance	3,508,355	16,538,633	20,046,988
Additions
Disposals	(195,997)	(1,528,862)	(1,724,859)
Closing balance	3,312,358	15,009,771	18,322,129
Accumulated depreciation
Opening balance	234,974	10,388,531	10,623,505
Depreciation for the period		261,092	261,092
Disposals	(21,122)	(943.491)	(964.612)
Closing balance	213,853	9.706.133	9.919.985
Accumulated impairment
Opening balance		1,243,502	1,243,502
Impairment for the period		(494.358)	(494.358)
Closing balance		749,144	749,144
Net Investment properties	3,098,506	4,554,494	7,653,000

	31.03.2020
	Land and natural resources	Buildings and other constructions	Total
Investment properties
Openinq balance	3,312,358	15,009,771	18,322,129
Additions
Disposals
Closing balance	3.312.358	15,009,771	18,322,129
Accumulated depreciation
Opening balance	213.853	9.706.133	9.919.985
Depreciation for the period		64.382	64,382
Disposals
Closing balance	213,853	9,770,514	9,984,367
Accumulated impairment
Opening balance		749,144	749,144
Impairment for the period
Closing balance		749.144	749,144
Net Investment properties	3.098.506	4,490,113	7,588,618

These assets are not allocated to the Group operating activities, being in the market available for lease.

Depreciation for the three-month period ended on 31 March 2020, of 64,382 Euros on 31 March 2019) was recorded in the caption Depreciation/amortisation and impairment of investments, net.

The market value of these assets, which are classified as investment property, in accordance with the valuations obtained at the end of the fiscal year 2019 which were conducted by independent entities, amounts to 12,261,900 Euros.

In the year ended 31 December 2019, the amount recorded under the disposals heading relates to the sale of three properties having the corresponding accounting gains, of 353 thousand Euros, been recorded in the caption Gains/Losses on disposal of assets.

Impairment losses for the year ended 31 December 2019 amounting to (494,358) Euros were recorded in the caption Depreciation/amortisation and impairments, net and are explained by the market value reduction observed in some buildings.

7.

Subsidiary companies

As at 31 December 2019 and 31 March 2020, the parent company, CTT - Correios de Portugal, S.A. and the following subsidiaries were included in the consolidation:

Company name	Place of business	Head office	31.12.2019 Percentage of ownership			31.03.2020 Percentage of ownership
			Direct	Indirect	Total	Direct	Indirect	Total
Parent company:
CTT - Correios de Portugal, S.A.	Portugal	Av. D. João II Nº 13 1999-001 Lishoa
Subsidiaries:
CTT Expresso - Serviços Postais e Logística, S.A. ("CTT Expresso")	Portugal	Av. D. João II N.º 13 1999-001 Lisboa	100		100	100		100

Payshop Portugal, S.A. ("Payshop")	Portugal	Av. D. loão II Nº 13 1999-001 Lisboa	-	100	100		100	100
CTT Contacto, S.A.		Av. D. João II N.º 13	100		100	100		100
("CTT Con")	Portugal	1999-001 Lisboa
Correio Expresso de Mocambique, S.A.	Mozambique	Av. 24 de Julho, Edificio 24, n.º 1097, 3.º Piso, Bairro da Polana	50		50	50		50
("CORRE")		Maputo - Mozambique
Banco CTT, S.A. ("BancoCTT")	Portugal	Av. D. loão II Nº 13 1999-001 Lisboa	100		100	100		100
321 Crédito - Instituição Financeira de Crédito, S.A. ("321 Crédito")	Portugal	Av. Duque d'Avila, 46, 7ª B 1050-083 Lisboa		100	100		100	100

ln relation to the company CORRE, as the Group has the right to variable returns arising from its involvement and the ability to affect those returns, it is included in the consolidation.

Joint ventures

As at 31 December 2019 and 31 March 2020, the Group held the following interests in joint ventures, registered through the equity method:

Company name	Place of business	Head office	31.12.2019 Percentage of ownership			31.03.2020 Percentage of ownership
			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
MKTPlace - Comércio Eletrónico, S.A ("MKTP")	Portugal	Rua Eng.º Ferreira Dias 924 Esc. 5 Porto	50		50	50		50

On 2 April, 6 May and 6 August 2019, the company MKTPlace – Comércio Eletrónico, S.A., was subject to capital increases in the amount of 3,625,523 Euros made by CTT.

Associated companies

As at 31 December 2019 and 31 March 2020, the Group held the following interests in associated companies accounted for by the equity method:

Company name	Place of business	Head office	31.12.2019 Percentage of ownership			31.03.2020 Percentage of ownership
			Direct Indirect		Total Direct		Indirect	Total
Multicert - Serviços de Certificação Electrónica, S.A. ("Multicert")	Portugal	Lagoas Parque, Edifício 3, Piso 3 Oeiras	20	-	20	20	-	20
Mafelosa, SL(a)	Spain	Castellon - Spain	-	25	25	-	25	25
Urpacksur, SL (a)	Spain	Málaga - Spain	-	30	30	-	30	30

49 Companyheldby CTT Expresso - Serviços Postais eLogistica, S.A.,branch in Spain (until 2018 was herity has no activity.

Structured entities

Additionally, considering the requirements of IFRS 10, the Group's consolidation perimeter includes the following structured entities:

Name			Constitution Year
Ulisses Finance No.1	2017	Portugal	12.2%	Full
Chaves Funding No.8 ' '	2019	Portugal	100%	Full

(*) Entities incorporated in the scope of securitisation operations, recorded in the consolidated financial statements in accordance with the Group's continued involvement, determined based on the residual interests (equity piece) of the respective vehicles .

The main impacts of the consolidation of these structured entities on the Group's accounts are the following:

		31.12.2019 31.03.2020
Cash and cash equivalents	7.730.012	8.927.762
Other banking financial liabilities (Debt securities issued)		76.077.368 67.611.091

Changes in the consolidation perimeter

In the year ended 31 December 2019, the consolidation perimeter was changed following the acquisition of 321 Crédito – Instituição Financeira de Crédito, S.A..

During the three-month period ended 31 March 2020, there were no changes in the consolidation perimeter.

00 Debt securities

As at 31 December 2019 and 31 March 2020, the caption Debt securities, in the Group, showed the following composition:

		31.03.2020
Non-current
Financial assets at fair value through other
comprehensive income (1)
Government bonds	528,420	1.504.819
Bonds issued by other entities	31.12.2019 528.420 409,886,034 14.605.943 (169.217) 424.322.759 424,851,179 13,727	9,177,417
		10.682.236
Financial assets at amortised cost
Government bonds		424,299,602
Bonds issued by other entities		4,362,706
Impairment		(171.646)
		428,490,662
		439,172,898
Current
Financial assets at fair value through other
comprehensive income (1)
Government bonds		23,639
Bonds issued by other entities		4.906
	13,727	28.546
Financial assets at amortised cost
Government bonds	31,536,069	21,663,909
Bonds issued by other entities	14.491	13,377,489
Impairment	(4,136)	(5.382)
	31.546.424	35,036,016
	31,560,152	35,064,562
	456,411,331	474,237,460

(1) As at 31 December 2019 and 31 March 2020 includes the amount of 225 Euros and 6,501 Euros, respectively, regarding Accumulated impairment losses.

The analysis of the Financial assets at fair Value through other comprehensive income and the Financial assets at amortised cost, by remaining maturity, as at 31 December 2019 and 31 March 2020 is detailed as follows:

		31.12.2019
		Current			Non-current
	months	Due within 3 Over 3 months and less than 1 year	Total	Over 1 year and less than 3 years	Over 3 years	Total	Total
Financial assets at fair value through other comprehensive income (1)
Government honds
National	13,727		13,727	528,420		528,420	542,147
Foreign				1			-
Bonds issued by other entities
National
Foreign
	13,727		13,727	528,420		528,420	542,147
14 Ac at 21 December 2019 includes the amount of 225 Euros regarding Accumulated instac

		31.12.2019
		Current			Non-current
	months	Due within 3 Over 3 months and less than 1 year	Total	Over 1 year and less than 3 years	Over 3 years	Total	Total
Financial assets at amortised cost
Government bonds
National	4.538.504	4.717.697	9.256.202	41.143.284	236,717,591	277,860,875	287,117,077
Foreign	752.422	21.527.446	22.279.868	34.645.814	97.379.345	132,025,158	154,305,026
Bonds issued by other entities
National	14,491		14.491	14,605,943		14,605,943	14.620.434
Foreign
	5.305.417	26.245.143	31.550.561	90.395.041	334.096.936	424.491.976	456.042.537

	31.03.2020
	Current			Non-current
	months	Due within 3 Over 3 months and less than 1 year	Total	Over 1 year and less than 3 years	Over 3 years	Total	Total
Financial assets at fair value through other
comprehensive income(1)
Government bonds
National	23,639		23,639	1,504,819	1	1,504,819	1,528,458
Foreign							-
Bonds issued by other entities
National	4.906		4,906	9,177,417	-	9.177.417	9.182,323
Foreign					-		1
	28,546	-	28,546	10,682,236	1	10,682,236	10,710,782

(1) As at 31 March 2020 includes the amount of 6,501 Euros regarding Accumulated impairment losses.

		31.03.2020
		Current			Non-current
	months	Due within 3 Over 3 months and less than 1 year	Total	Over 1 year and less than 3 years	Over 3 years	Total	Total
Financial assets at amortised cost
Government bonds
National	6.933.541		6.933.541	40.993.954	235,977,720	276,971,674	283.905.215
Foreign	7.935.294	6.795.074	14.730.368	34.622.143	112.705.786	147.327.929	162,058,296
Bonds issued by other entities
National	5.761.736	7.615.754	13.377.489	4.362.706	1	4.362.706	17.740.195
Foreign
	20.630.571	14.410.827	35,041,398	79.978.803	348.683.506	428,662,308	463,703,706

The impairment losses, for the year ended 31 December 2019 and three-month period ended 31 March 2020, are detailed as follows:

	31.12.2019
	Opening balance	Increases	Reversals	Utilisations	Transfers	Closing balance
Non-current assets
Financial assets at fair value through other comprehensive income	504	19	(40,529)	(299)	40,529	225
Financial assets at amortised cost	164.379	31,512	(43.292)		16.618	169.217
	164.883	31,531	(83.821)	(299)	57.147	169,442
Current assets
Financial assets at fair value through other comprehensive income	127.286	1		(86.757)	(40.529)	-
Financial assets at amortised cost	18.447	2.678	(370)		(16.618)	4,136
	145,733	2,678	(370)	(86,757)	(57,147)	4,136
Financial assets at fair value through other comprehensive income	127.790	19	(40.529)	(87.056)	-	225
Financial assets at amortised cost	182,826	34,190	(43.662)		1	173,353
	310,616	34,209	(84,191)	(87,056)	1	173,578

		31.03.2020
	Opening balance	Increases	Reversals	Utilisations	Transfers	Closing balance
Non-current assets
Financial assets at fair value through other comprehensive Income	225	6,259				6.484
Financial assets at amortised cost	169.217	8.914	(5.351)		(1.134)	171,646
	169,442	15,173	(5.351)		(1.134)	178,130
Current assets
Financial assets at fair value through other comprehensive income		17				17
Financial assets at amortised cost	4,136	280	(168)		1,134	5.382
	4,136	297	(168)	1	1,134	5,399
Financial assets at fair value through other comprehensive income	225	6.276	1	-	-	6.501
Financial assets at amortised cost	173,353	9,194	(5.519)	-		177,028
	173.578	15.469	(5.519)	-	1	183.528

Regarding the movements in impairment losses of Financial assets at fair value through other comprehensive income by stages, in the year ended 31 December 2019 and three-month period ended 31 March 2020, they are detailed as follows:

	31.12.2019	31.03.2020
	Stage 1	Stage 1
Opening balance	127,790	225
Change in the accounting standards
Change in period:
Increases due to origination and acquisition		6.275
Changes due to change in credit risk	19	1
Decrease due to derecognition repayments and disposals	(127.585)
Write-offs
Changes due to update in the institution's methodology for estimation
Foreign exchange and other
Impairment - Financial assets at fair value through other	225
comprehensive income		6,501

The reconciliation of accounting movements related to impairment losses is presented below:

	31.12.2019	31.03.2020
	Stage 1	Stage 1
Opening balance	127,790	225
Change in the accounting standards
Change in period:
ECL income statement change for the period	(40.510)	6.276
Stage transfers (net)
Disposals
Utilisations during the period	(87.056)
Write-offs
Write-off recoveries
Foreign exchange and other
Impairment - Financial assets at fair value through other	225	6.501
comprehensive income

For the impairment losses of Financial assets at amortised cost, the movements by stages, in the year ended 31 December 2019 and three-month period ended 31 March 2020, they are detailed as follows:

	31.12.2019	31.03.2020
	Stage 1	Stage 1
Opening balance	182.825	173,353
Change in the accounting standards
Change in period:
Increases due to origination and acquisition	13,008	1,951
Changes due to change in credit risk	(4,033)	2.003
Decrease due to derecognition repayments and disposals	(18,447)	(278)
Write-offs
Changes due to update in the institution's methodology for estimation
Foreign exchange and other
Impairment - Financial assets at amortised cost	173.353	177.028

The reconciliation of accounting movements related to impairment losses is presented below:

	31.12.2019	31.03.2020
	Stage 1	Stage 1
Opening balance	182.825	173,353
Change in the accounting standards
Change in period:
ECL income statement change for the period	(9.473)	3,675
Stage transfers (net)
Disposals
Utilisations during the period
Write-offs
Write-off recoveries
Foreign exchange and other
Impairment - Financial assets at amortised cost	173.353	177.028

According to the current accounting policy, the Group regularly assesses whether there is objective evidence of impairment in its financial asset portfolios at fair value through other comprehensive income and other financial cost, following the criteria defined in the accounting policies.

9. Other banking financial assets and liabilities

As at 31 December 2019 and 31 March 2020, the Group headings Other banking financial assets and Other banking financial liabilities showed the following composition:

	and the production of the comments of the comments of the comments of the comments of the comments of the comments of the comments of the comments of the comments of the comm	227777777777
Non-current assets
Investments in credit institutions
Loans to credit institutions	18,928,416	16,956,034
Impairment	(166,249)	(148,926)
Other	1,882	2,162
	18,764,049	16,809,270
Current assets
Investments in credit institutions	1,650,072	2,350,000
Loans to credit institutions	11,551,960	10,356,483
Impairment	(47,303)	(41,900)
Other	5,688,014	5,773,478
Impairment	(4,182,457)	(3,259,017)
	14,660,286	15,179,044
	33.424.335	31,988,314
Non-current liabilities
Debt securities issued	76,060,295	67,595,563
	76,060,295	67,595,563
Current liabilities
Debt securities issued	17,073	15,528
Other	17,970,646	20,624,297
	17,987,719	20,639,825
	94,048,014	88,235,388

lnvestments in credit institutions and Loans to credit institutions

Regarding the above-mentioned captions, the scheduling by maturity is as follows:

	31.12.2019	31.03.2020
Up to 3 months	3.367.931	3.203.217
From 3 to 12 months	9,834,101	9,503,266
From 1 to 3 years	13.689.301	12.838.813
Over 3 years	5.239.115	4,117,222
	32,130,448	29,662,517

lmpairment

The impairment losses, for the year ended 31 December 2019 and three-month period ended 31 March 2020, are detailed as follows:

		31.12.2019
	Openinq balance	Increases	Reversals	Utilisations	Transfers	Changes in the consolidation perimeter	Closing balance
Non-current assets
Investments and loans in credit institutions	217,751	91,523	(244,427)		101,403	-	166,249
	217,751	91,523	(244,427)		101,403	-	166,249
Current assets
Investments and loans in credit institutions	197,018	24,916	(73,229)		(101,403)		47,303
Other	10,927	224.755	(53,534)		(10,927)	4,011,235	4,182,457
	207,945	249,672	(126,763)	-	(112,330)	4,011,235	4,229,760
	425,696	341,194	(371,190)	-	(10,927)	4,011,235	4,396,009
		31.03.2020
	Opening balance	Increases	Reversals	Utilisations	Transfers	Changes in the consolidation perimeter	Closing balance
Non-current assets
Investments and loans in credit institutions	166,249	1.293	(19,029)		413		148,926
	166,249	1,293	(19,029)	-	413	-	148,926
Current assets
Investments and loans in credit institutions	47,303	364	(5,354)		(413)	-	41,900
Other	4,182,457	4,999	(928,438)	-		-	3,259,017
	4.229.760	5,363	(933.792)	-	(413)	-	3,300,917
	4,396,009	6,655	(952,821)	-	1	-	3,449,843

Regarding the movements in impairment losses on investments and loans to credit institutions by stages, in the year ended 31 December 2019 and three-month period ended 31 March 2020, they are detailed as follows:

	31.12.2019	31.03.2020
	Stage 1	Stage 1
Opening balance	414,769	213,552
Change in the accounting standards
Change in period:
Increases due to origination and acquisition	52.737	1,656
Changes due to change in credit risk	(64.377)	(21.930)
Decrease due to derecognition repayments and disposals	(189,576)	(2.453)
Write-offs
Changes due to update in the institution's methodology for estimation
Foreign exchange and other
Impairment	213.552	190,826

The reconciliation of accounting movements related to impairment losses is presented below:

	31.12.2019	31.03.2020
	Stage 1	Stage 1
Opening balance	414,769	213,552
Change in the accounting standards
Change in period:
ECL income statement change for the period	(201.217)	(22.726)
Stage transfers (net)
Disposals
Utilisations during the period
Write-offs
Write-off recoveries
Foreign exchange and other
Impairment	213,552	190.826

Debt securities issued

This caption showed the following composition:

	31.12.2019	31.03.2020
Securitisations	76,077,368	67,611,091
	76,077,368	67,611,091

As at 31 December 2019 and 31 March 2020 the Debt securities issued are analysed as follows:

31.12.2019
	ssue	lssue date	Maturity date	Remuneration	Nominal value	Book value
Ulisses Finance No.1 – Class A	July 2017		July 2033	Euribor 1M + 85 b.p.	61.938.000	61.963.646
Ulisses Finance No.1 – Class B	July 2017		July 2033	Euribor 1M + 160 b.p.	7.000.000	7.004.497
Ulisses Finance No.1 - Class C	July 2017		July 2033	Euribor 1M + 375 b.p.	7.100.000	7.109.225
					76,038,000	76.077.368

31.03.2020
	ssue	ssue date	Maturity date	Remuneration	Nominal value	Book value

Ulisses Finance No.1 - Class A	July 2017		July 2033	Euribor 1M + 85 b.p.	53.406.961	53,483,095
Ulisses Finance No.1 - Class B	July 2017		July 2033	Euribor 1M + 160 b.p.	7.000.000	7.011.583
Ulisses Finance No.1 - Class C	July 2017		July 2033	Euribor 1M + 375 b.p.	7.100.000	7.116.413
					67,506,961	67,611,091

The movement of this item in the year ended 31 December 2019 and the three-month period ended 31 March 2020 is as follows:

			31.12.2019
	Opening balance	Changes in the consolidation perimeter	ssues	Repayments	Other movements	Closing balance
Chaves Funding No.7	-	201,660,418	-	(201,600,000)	(60,418)
Ulisses Finance No.1	-	101,060,139	-	(25,007,517)	24,746	76,077,368
	l	302,720,556	-	(226,607,517)	(35,672)	76,077,368
			31.03.2020
		Changes in the			Other
	Opening balance	consolidation perimeter	ssues	Repayments	movements	Closing balance
Chaves Funding No.7
Ulisses Finance No.1	76,077,368	-	-	(8,531,092)	64,816	67,611,091
	76,077,368	1	1	(8,531,092)	64,816	67,611,091

The scheduling by maturity regarding this caption is as follows:

				31.12.2019
	Current
	months	Due within 3 Over 3 months and less than 1 year	Total	Over 1 year and less than 3 years	Over 3 years	Total	Total
Securitisations	17.073	1	17.073	1	76.060.295	76.060.295	76.077.368
	17,073	-	17,073	-	76,060,295	76,060,295	76,077,368


		Current		31.03.2020	Non-current
	months	Due within 3 Over 3 months and less than 1 year	Total	Over 1 year and less than 3 years	Over 3 years	Total	Total
Securitisations	15,528		15.528		67,595,563	67,595,563	67,611,091

10. Credit to banking clients

As at 31 December 2019 and 31 March 2020, the Group caption Credit to banking clients was detailed as follows:

	31.12.2019	31.03.2020
Performing loans	884,922,781	947,100,296
Mortgage Loans	405,168,238	442,547,540
Autol oans	469.774.742	495,207.596
Leasings	8.977.360	8.236.411
Overdrafts	1,002,441	1,108,749
Other credits
Overdue loans	4.875.990	5.781.114
Overdue loans - less than 90 days	740.614	917,313
Overdue loans - more than 90 days	4.135.376	4.863.801
	889,798,770	952,881,410
Credit risk impairment	(3.978.200)	(5,718.180)
	885,820,571	947,163,230

The maturity analysis of the Credit to bank clients as at 31 December 2019 and 31 March 2020 is detailed as follows:

		31.12.2019
		Current			Non-current
	At sight / Undetermined	Due within 3 months	Over 3 months and less than 1 vear	Total	Over 1 year and less than 3 years	Over 3 years	Total	Total
Mortgage loans	563	2.963.207	8.424.196	11.387.966	22,801,200	370,979,635	393.780.835	405.168.801
Auto Loans	3.120.988	21.508.729	53.448.350	78.078.067	138.181.295	256,636,368	394.817.663	472.895.730
Leasings	445,221	671,623	1,843,173	2.960.017	3,962,260	2,500,304	6,462,564	9.422.580
Overdrafts	1.682.194			1,682,194				1,682,194
Other credits	629,465			629.465				629,465
	5.878.431	25.143.559	63,715,719	94,737,709	164,944,755	630,116,307	795,061,062	889,798,770

		31.03.2020
		Current			Non-current
	At sight / Undetermined	Due within 3 months	Over 3 months and less than 1 vear	Total	Over 1 year and less than 3 years	Over 3 years	Total	Total
Mortgage loans		3.253.096	9.212.392	12.465.488	24.923.742	405.158.310	430.082.052	442.547.540
Auto Loans	3.927.080	22.053.594	56.088.085	82.068.759	144.732.558	272.333.359	417.065.916	499,134,676
Leasings	449.968	603,012	1.661.023	2,714,002	3,732,439	2,239,937	5.972.376	8.686.378
Overdrafts	1,886,484			1.886.484				1.886.484
Other credits	626,332			626,332				626,332
	6.889.864	25.909.702	66.961.500	99,761,066	173.388.739	679.731.606	853,120,344	952,881,410

The breakdown of this heading by type of rate is as follows:

	31.12.2019	31.03.2020
Fixed rate	427.176.016	455.440.226
Floating rate	462,622,754	497,441,184
	889.798.770	952.881.410
Credit risk impairment	(3,978,200)	(5,718,180)
	885,820,571 947,163,230

As at 31 December 2019 and 31 March 2020, the analysis of this caption by type of collateral, is presented as follows:

	Performing Loans	Overdue Loans	Gross amount	Impairment	Net amount
Asset-backed Loans	414 131 534	733.350	414.864.883	(410.314)	414.454.569
Other quaranteed Loans	463.692.443	1.651.366	465.343.809	(1.938.840)	463.404.969
Unsecured Loans	7.098.804	2.491.274	9.590.078	(1.629.045)	7.961.033
	884.922.781		4.875.990		(3.978.200) 885.820.570

		31.03.2020
	Performing Loans	Overdue Loans	Gross amount	Impairment	Net amount
Asset-backed Loans	450.807.867	836.620	451.644.487	(577.101)	451.067.386
Other quaranteed Loans	485,884,504	2.073.996	487.958.500	(2.983.347)	484,975,152
Unsecured Loans	10.407.925	2.870.498	13.278.423	(2.157.731)	11.120.692
	947.100.296	5.781.114	952,881,410	(5,718,180)	947.163.230

The credit type analysis of the caption, as at 31 December 2019 and 31 March 2020 is detailed as follows:

		31.12.2019
	Performing Loans	Overdue Loans	Gross amount	Impairment	Net amount
Mortgage Loans	405.168.238	563	405.168.801	(94.675)	405.074.126
Auto Loans	469,774,742	3,120,988	472.895.730	(3.339.385)	469,556,345
Leasings	8,977,360	445,221	9.422.580	(99.647)	9,322,933
Overdrafts	1,002,441	679,753	1,682,194	(434.392)	1,247,802
Other credits		629.465	629.465	(10.101)	619.364
	884,922,781	4,875,990	889,798,770	(3,978,200)	885,820,571

		31.03.2020
	Performing Loans	Overdue Loans	Gross amount	Impairment	Net amount
Mortgage Loans	442.547.540		442.547.540	(144.621)	442.402.918
Auto Loans	495.207.596	3.927.080	499.134.676	(4.992.208)	494.142.468
Leasings	8.236.411	449.968	8.686.378	(82.083)	8.604.295
Overdrafts	1,108,749	777.735	1.886.484	(492.029)	1.394.455
Other credits		626.332	626.332	(7.239)	619,093
	947.100.296	5.781.114	952.881.410	(5,718,180)	947.163.230

The analysis of credit to bank clients as at 31 December 2019 and 31 March 2020, by sector of activity, is as follows:
31.12.2019

	Performing Loans	Overdue Loans	Gross amount	Impairment	Net amount
Companies
Agriculture, forestry and fishing	1,111,340	8,581	1,119,921	(19,854)	1,100,067
Mining and quarrying	22,559		22,559	(130)	22.430
Manufacturing	3,414,359	82,939	3,497,297	(53,265)	3,444,032
Water supply	192,904	5,712	198,615	(5,806)	192.809
Construction	8,289,160	198,054	8,487,214	(46,230)	8,440,985
Wholesale and retail trade	5,370,786	654,597	6,025,382	(41,074)	5,984,309
Transport and storage	1,459,131	27,086	1,486,217	(35,098)	1,451,119
Accommodation and food service activities	1,969,233	15,598	1,984,831	(40,979)	1,943,852
Information and communication	347.009	1.459	348,467	(2,804)	345.663
Financial and insurance activities	167,845	702	168,547	(2,503)	166,044
Real estate activities	1,788,935	10,730	1,799,665	(12,427)	1,787,238
Professional, scientific and technical activities	1,107,319	7,105	1,114,424	(12,141)	1,102,283
Administrative and support service activities	1,611,610	289,475	1,901,084	(19,749)	1,881,336
Education	648,410	997	649.407	(4,634)	644.773
Human health services and social work activities	876,026	851	876,878	(14,683)	862,195
Arts, entertainment and recreation	478,756	2,074	480,830	(9,266)	471.564
Other services	14,038,952	34,985	14,073,937	(106,888)	13.967.049
Individuals
Mortgage Loans	405.168.238	563	405,168,801	(94,675)	405.074.126
Consumer Loans	436.860.210	3,534,481	440.394.691	(3,455,994)	436.938.697
	884,922,781	4.875.989	889,798,770	(3,978,200)	885,820,570

	31.03.2020
	Performing Loans	Overdue Loans	Gross amount	Impairment	Net amount
Companies
Agriculture, forestry and fishing	1.075.328	9.584	1.084.911	(17.542)	1.067.369
Mining and quarrying	21.966		21.966	(116)	21.851
Manufacturing	3,133,374	85.301	3,218,675	(63,309)	3,155,366
Water supply	180.589	5,712	186.301	(5.801)	180.500
Construction	7,466,936	315,308	7,782,244	(80.592)	7,701,652
Wholesale and retail trade	4.981.315	699.441	5.680.756	(56.260)	5.624.497
Transport and storage	1,381,735	19,426	1,401,162	(52,296)	1,348,865
Accommodation and food service activities	1.778.597	17.085	1.795.683	(42,470)	1.753.213
Information and communication	327,134	1.459	328,593	(2,528)	326.065
Financial and insurance activities	145.657	1,005	146,663	(2,385)	144,277
Real estate activities	1,650,626	15,545	1,666,171	(7,273)	1,658,898
Professional, scientific and technical activities	1,018,700	6,769	1,025,469	(18,755)	1,006,713
Administrative and support service activities	1.509.490	289,634	1,799,124	(19,555)	1,779,569
Education	614,104	836	614,941	(5,551)	609,390
Human health services and social work activities	862,251	3,239	865,490	(14,288)	851,201
Arts, entertainment and recreation	457,435	5,788	463,224	(6,935)	456,289
Other services	17,929,922	62,742	17.992.664	(194,727)	17.797.937
Individuals
Mortgage Loans	442.648.037	1,584	442.649.621	(146,248)	442,503,373
Consumer Loans	459,917,100	4,240,654	464,157,754	(4,981,550)	459,176,204
	947.100.296	5.781.114	952.881.410	(5.718.180)	947.163.230

The total credit portfolio, split by stage according to IFRS 9, is analysed as follows:

	2 market for a come of the comments of the comments of the comments of the comments of the comments of the comments of the comments of the comments of the comments of the for	22.05.2020
Stage 1	834.895.752	889.654.635
Gross amount	836.958.434	891.922.703
Impairment	(2.062.682)	(2,268,068)
Stage 2	39.336.322	44.929.798
Gross amount	40.207.967	46.298.851
Impairment	(871.645)	(1.369.052)
Stage 3	11.588.496	12.578.796
Gross amount	12.632.369	14.659.856
Impairment	(1.043.873)	(2,081,060)
	885,820,571	947.163.230

The caption credit to bank clients includes the effect of traditional securitisation operations, through Special Purpose Entities (SPE) and subject to consolidation in accordance with IFRS 10.

The caption credit to bank clients includes the following amounts related to finance leases contracts:

	31.12.2019	31.03.2020
Amount of future minimum payments	9,632,194	8,842,582
Interest not vet due	(654.835)	(606.172)
Present value	8,977,360	8,236,411

The amount of future minimum payments of lease contracts, by maturity terms, is analysed as follows:

	31.12.2019	31.03.2020
Due within 1 year	2,532,976	2,281,673
Due between 1 to 5 years	5,835,429	5,405,074
Over 5 years	1,263,789	1,155,835
Amount of future minimum payments	9,632,194	8,842,582

The analysis of financial leases contracts, by type of client, is presented as follows:

	31.12.2019	31.03.2020
Individuals	1,097,230	1,015,767
Home	95,072	91,596
Consumer
Others	1,002,158	924.171
Companies	7,880,129	7,220,643
Equipment	634.577	619.776
Real Estate	7,245,552	6,600,867
	8,977,360	8,236,411

lmpairment losses

During the year ended 31 December 2019 and three-month period ended 31 March 2020, the movement in the Groupunder the Accumulated impairment losses caption (Note 13) was as follows:

		31.12.2019
	Opening balance	Increases	Reversals	Utilisations	Transfers	PPA adjustments	Changes in the consolidation perimeter	Closing balance
Non-current assets
Credit to banking clients	225.968	2.298.517	(1.777.703)	(469.677)	611.781	(5.446.614)	7.149.174	2.591.450
	225,968	2.298.517	(1.777.703)	(469.677)	611.781	(5.446.614)	7.149.174	2.591.450
Current assets
Credit to banking clients	231.556	5.409.498	(2.876.295)	(705.364)	(611.781)	(12.694.345)	12.633.482	1.386.750
	231.556	5.409.498	(2.876.295)	(705.364)	(611.781)	(12.694.345)	12.633.482	1.386.750
	457.525	7.708.015	(4.653.998)	(1.175.041)		(18.140.959)	19.782.656	3.978.200

		31.03.2020
	Opening balance	Increases	Reversals	Utilisations	Transfers	Other adjustments	Changes in the consolidation perimeter	Closing balance
Non-current assets
Credit to banking clients	2.591.450	1.191.584	(184.440)	(7.588)	(17,022)	126.445		3.700.428
	2.591.450	1.191.584	(184.440)	(7.588)	(17.022)	126.445		3.700.428
Current assets
Credit to banking clients	1.386.750	649.741	(100.571)	(4.138)	17.022	68.947		2.017.752
	1,386,750	649.741	(100.571)	(4.138)	17,022	68.947	-	2.017.752
	3,978,200	1,841,325	(285.011)	(11.726)		195.393		5,718,180

Theimpairment losses of Credit to banking clients (increases net of reversals) in the three-month period ended 31 March 2020, amounting to 1,556,314 Euros (96,545 Euros at 31 March 2019) was recorded under the caption Impairment of accounts receivable, net.

Regarding the movements in impairment losses by stages, in the year ended 31 December 2019 and three-month period ended 31 March 2020, they are detailed as follows:

	31.12.2019
	Stage 1	Stage 2	Stage 3	Total
Opening balance	184,341	67,195	205,989	457,525
Change in period:
Increases due to origination and acquisition	2,553,925	305,614	230,886	3,090,425
Changes due to change in credit risk	(842,651)	1,469,995	(49,602)	577,742
Changes due to modifications without derecognition
Decrease due to derecognition repayments and disposals	(139,146)	(64,702)	(410,302)	(614,150)
Write-offs			(1,175,041)	(1,175,041)
Changes due to update in the institution's methodology for estimation
Transfers to:
Stage 1	403,848	(373,530)	(30,318)
Stage 2	(82,928)	121,868	(38,940)	-
Stage 3	(14,707)	(717,728)	732,435	-
Foreign exchange and other		62,932	1,578,765	1,641,697
lmpairment	2.062.682	871,644	1.043.873	3,978,200
Of which: POCI			(1,293,376)	(1,293,376)

	31.03.2020
	Stage 1	Stage 2	Stage 3	Total
Opening balance	2,062,682	871,644	1,043,873	3,978,200
Change in period:
Increases due to origination and acquisition	307,082	22,830	4,041	333,952
Changes due to change in credit risk	(305,027)	947,724	793,167	1,435,863
Changes due to modifications without derecognition
Decrease due to derecognition repayments and disposals	(60,451)	(11,866)	(141,185)	(213,501)
Write-offs			(11,726)	(11,726)
Changes due to update in the institution's methodology for estimation
Transfers to:
Stage 1	310.078	(296,015)	(14,064)
Stage 2	(102,509)	194,652	(92,143)
Stage 3	(4,692)	(382,073)	386,766
Foreign exchange and other	60,905	22,157	112,331	195,393
lmpairment	2,268,068	1,369,052	2,081,060	5,718,180
Of which: POCI			(1,189,000)	(1,189,000)

The reconciliation of accounting movements related to impairment losses is presented below:

	31.12.2019
	Stage 1	Stage 2	Stage 3	Total
Opening balance	184.341	67,195	205,989	457,525
Change in period:
ECL income statement change for the period	1,572,128	1,710,907	(229.018)	3,054,017
Stage transfers (net)	306,213	(969,390)	663.177	1
Disposals
Utilisations during the period
Write-offs	1		(1,175,041)	(1,175,041)
Write-off recoveries
Foreign exchange and other		62,932	1,578,765	1.641.697
lmpairment	2,062,682	871,644	1,043,873	3,978,200

	31.03.2020
	Stage 1	Stage 2	Stage 3	Total
Opening balance	2.062.682	871,644	1.043.873	3.978.200
Change in period:
ECL income statement change for the period	(58.396)	958,688	656,022	1,556,314
Stage transfers (net)	202.877	(483,437)	280,559
Disposals
Utilisations during the period
Write-offs			(11.726)	(11,726)
Write-off recoveries
Foreign exchange and other	60,905	22,157	112,331	195,393
Impairment	2.268.068	1.369.052	2.081.060	5.718.180

Deferrals 11.

As at 31 December 2019 and 31 March 2020, the Deferrals included in current assets and current and non-current liabilities of the Group showed the following composition:

	31.12.2019	31.03.2020
Assets deferrals
Current
Rents payable	1,391,768	1,534,345
Meal allowances	1,486,218	1,475,101
Other	4.427.275	6,636,789
	7,305,261	9,646,235
Liabilities deferrals
Non-current
Investment subsidy	294,490	291.690
	294,490	291,690
Current
Investment subsidy	11,201	11,201
Contratual liabilities	1,533,212	1,427,407
Other	1,910,064	1,798,137
	3.454.477	3,236,745
	3.748.967	3,528,435

The caption "Contractual liabilities" results from the application of IFRS 1.5 - 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.

The "Contractual liabilities" recognised by the Group essentially refer to values related to stamps and postage of priority mail in the amount of 934,354 euros (1,028,940 euros on 31 December 2019), whose revenue is expected to be recognised in January 2020 (estimate of 80% of the item's value) and the remaining during 2020, and to objects invoiced and not delivered on 31 March 2020 in the express segment, in the amount of 493,052 euros (504,272 euros as of 31 December 2019), whose revenue is recognised upon delivery in the following month.

The revenue recognised by the Group in the period, included in the balance of Contractual liabilities at the beginning of the period amounted to 710,473 Euros.

No "Assets resulting from contracts" associated with the application of IFRS 15 – Revenue from contracts with customers were recognised.

12. Cash and cash equivalents

As at 31 December 2019 and 31 March 2020, cash and cash equivalents correspond to the value of cash, sight deposits, term deposits and cash investments on the monetary market, net of bank overdrafts and equivalentshort-termbank financing, and is detailed as follows:

	31.12.2019	31.03.2020

Cash	59.266.424	49.486.227
Slight deposits	182.192.757	45,086,522
Demand deposits at Bank of Portugal	29,497,627	93.558.709
Deposits in other credit institutions	107,376,274	25,790,727
Term deposits	64.662.643	85,053,868
Cash and cash equivalents (Balance sheet)	442.995.724	298.976.052
Sight deposits at Bank of Portugal	(25.924.034)	(89,431,857)
Outstandinq checks / Checks clearing	(2.226.045)	(2,952,961)
Impairment of slight and term deposits	19.924	20,822
Cash and cash equivalents (Cash flow statement)	414,865,569	206,612,056

The heading Sight deposits at Bank of Portugal includes mandatory deposits in order to meet the legal requirements to maintain a minimum cash reserve in accordance with the provisions of Regulation (EU) No. 1358 / 2011 of European Central Bank of 14 December 2011, which states that the minimum cash requirements kept as demand deposits at Bank of Portugal amounts to 1% of deposits and other liabilities.

Impairment

In the scope of IFRS 9 – Financial instruments the Group has begun to recognised impairment on sight and term deposits as well as on investments in credit institutions. Therefore, in the year ended 31 December 2019 and three-month period ended 31 March 2020, the movement recorded under the caption "Impairment of sight and term deposits" (Note 13) related to the Group is detail as follows:

	31.12.2019
	Opening balance	Increases	Reversals	Utilisations	Closing balance
Sight and term deposits	21.295	5.351 (6,723) 1	19,924
	21,295	5,351	(6,723)	1	19,924
			31.03.2020
	Opening balance	Increases	Reversals	Utilisations	Closing balance
Sight and term deposits	19.924	6.949	(6.051)	1	20,822
	19,924	6,949	(6,051)	-	20,822

The impairment losses (increases net of reversals) of sight and term deposits in the three-month period ended 31 March 2020, amounting to 899 Euros ((8,215) Euros at 31 March 2019) was recorded under the heading Impairment of accounts receivable, net.

13. Accumulated impairment losses

During the year ended 31 December 2019 and three-month period ended 31 March 2020, the following movements occurred in the Group's impairment losses:

	31.12.2019
	Opening balance	Increases	Reversals	Utilisations	Transfers	Changes in the perimeter	consolidation PPA adjustments	Closing balance
Non-current assets
Tangible fixed assets	24.256		(83)					24.173
Investment properties	1,243,502		(494,358)					749,144
	1,267,758	1	(494,442)			1		773,316
Debt securities	164,883	31,531	(83,821)	(299)	57,147			169,441
Other non-current assets	1,982,890				116,906			2.099.796
Credit to banking clients	225,968	2,298,517	(1,777,703)	(469,674)	611,781	7,149,174	(5,446,614)	2,591,449
Other banking financial assets	217,751	91,523	(244,428)		101,403			166,249
	2,591,492	2,421,571	(2,105,952)	(469,973)	887,237	7,149,174	(5,446,614)	5,026,935
	3,859,250	2,421,571	(2,600,394)	(469,973)	887,237	7,149,174	(5,446,614)	5,800,251
Current assets
Accounts receivable	33,436,621	7,204,092	(766,236)	(1,892,645)				37,981,832
Credit to banking clients	231,556	5,409,498	(2,876,295)	(705,365)	(611,781)	12,633,482	(12.694.345)	1,386,750
Debt securities	145,733	2,678	(370)	(86,758)	(57,147)			4,136
Other current assets	7,516,988	1,585,794	(100,275)	(554,795)	(105,979)			8,341,734
Other banking financial assets	207,945	249,671	(126,763)		(112,330)	4.011.236		4,229,759
Slight and term deposits	21,295	5,352	(6,723)					19,923
	41,560,139	14,457,085	(3,876,662)	(3,239,562)	(887,237)	16,644,718	(12.694,345)	51,964,134
Non-current assets held for sale		9	(3.059)			187,659		184,609
	-	9	(3.059)		-	187,659		184,609
Merchandise	1,824,111	313,018	(1,129)	(19,695)				2,116,305
Raw, subsidiary and consumable	633,526	91,662						725,188
	2,457,637	404,680	(1,129)	(19.695)	-	1	-	2,841,493
	44.017.776	14.861.773	(3,880,850)	(3,259,257)	(887,237)	16,832,377	(12,694,345)	54,990,236
	47,877,025	17,283,344	(6,481,244)	(3,729,231)	-	23,981,551	(18,140,959)	60,790,487

	31.03.2020
	Opening balance	Increases	Reversals	Utilisations	Transfers	Changes in the consolidation Other movements perimeter		Closing balance
Non-current assets
Tangible fixed assets	24,173	-			-			24,173
Investment properties	749,144							749,144
	773,317				-		-	773,317
Debt securities	169,441	15,173	(5,351)		(1,134)			178,130
Other non-current assets	2,099,796				64.702			2,164,498
Credit to banking clients	2,591,449	1,191,584	(184,440)	(7,588)	(17,022)		126,445	3,700,428
Other banking financial assets	166.249	1.293	(19.029)		413			148.926
	5,026,936	1,208,049	(208,820)	(7,588)	46,959		126.445	6,191,981
	5,800,253	1,208,049	(208,820)	(7,588)	46,959	-	126,445	6,965,298
Current assets
Accounts receivable	37,981,832	1,352,198	(465,114)	(440,610)				38,428,306
Credit to banking clients	1,386,750	649,741	(100,571)	(4.138)	17,022		68.947	2,017,752
Debt securities	4,136	297	(168)		1,134			5,399
Other current assets	8,341,734	335,729	(21,547)	(9.061)	490.252			9,137,107
Other banking financial assets	4,229,759	5,363	(933,792)		(413)			3,300,917
Slight and term deposits	19,923	6,949	(6,051)					20,822
	51,964,135	2,350,276	(1,527,243)	(453,809)	507,995	-	68,947	52,910,301
Non-current assets held for sale	184.609	1.536						186,145
	184,609	1,536	-	-	-	-	-	186,145
Merchandise	2,116,305	190,593		(104,706)				2,202,193
Raw, subsidiary and consumable	725,188	3,855		(2,255)				726,788
	2,841,493	194,448		(106,961)		-	-	2,928,981
	54,990,237	2,546,260	(1,527,243)	(560.769)	507,995		68,947	56,025,427
	60.790.490	3.754.309	(1.736.063)	(568.357)	554,954	-	195.392	62.990.725

14. Equity

As at 31 March 2020, the Company 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 31 December 2019 and 31 March 2020 the Company's shareholders with greater than or equal to 2% shareholdings, according to the information reported, are as follows:

			31.12.2019
Shareholder		No. of shares	0%	Nominal value
Manuel Champalimaud, SGPS, S.A. (1)		19.271.134	12.847%	9.635.567
Manuel Carlos de Melo Champalimaud		353,185	0.235%	176,593
Manuel Carlos de Melo Champalimaud (1)	Total	19,624,319	13.083%	9.812.160
GreenWood Builders Fund I, LP (2/		8,759,082	5.839%	4,379,541
GreenWood Investors LLC(2)	Total	8.759.082	5.839%	4,379,541
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	5,834,490	3.890%	2.917.245
BlackRock, Inc. 4)	Total	4.496.864	2.998%	2,248,432
BBVA Asset Management, SA SGIIC (5)	Total	3,495,499	2.330%	1,747,750
Wellington Management Group LLP(6)	Total	3.321.219	2.214%	1,660,610
BPI Gestão de Activos (7)	Total	3,044,307	2.030%	1,522,154
CTT, S.A. (own shares) (8)	Total	1	0.000%	1
Other shareholders	Total	92.931.474	61.954%	46.465.737
Total		150,000,000	100.000%	75,000,000

(1) Duarte Palma Leal Champalmaud, non-executive member of CTT, is Vice-Chairman. Qualified shareholding directly and indirectly attributable to Manuel Carlos de Melo Champalimaud.
(2) GreenWood Investors, LLC, of which Steven Wood, Non-Executive member of CTT, is a Managing Member exercises the voting rights not in its own name but on behalf of the fund | LP as its management company. The full chain of controlled undertakings through which the voting rights are held includes GreenWood Investors, LLC and GreenWood Performance Investors, LLC.
(3) Global Portfolio Investments, S.L. is controlled by Indumenta Pueri, S.L..
(4) The full chain of undertakings controlled by Black Rock, no. and through which the voting rights and or the financial instruments are effectively heldis shown as attachment to the qualifying holding press release of 14 November 2019 and available on CTT website (www.ctt.p).
(5) BBVA Asset Management, SA, SCIC exercises the voting rights own name but on behalf of the funds BBVA BOLSA EUROFI, BBVA BOLSA EUROPA Fl and BBVA BOLSA PLUS Fl as their management company. Cidessa Uno, SL is the direct controlling entity of BBVA Asset Management, SA, SGIIC.
(6) = The full chain of controlled undertakings through which the voting rights are held is shown as attachment to the gualifying holding press release of 2 December 2019 and available on CTT website (www.ctt.pt).
(7) is holding corresponds to the number of shares held by Portuguese securities investment funds managed by BPI Gestão de Activos, as well as held by portfolios regarding which BPI Gestão de Activos Fundos carries out the discretionary management.
(8) Executive Director Share Award Plan approved by the General Meeting held on 5 May 2015, a total of 600,530 own shares representing 0.400% of the share capital was awarded to the Company's Executive Directors, as long-term variable remuneration. At the present date, CTT holds thus 1 own share corresponding to 0.00% of the share capital and with the nominal value of E0.50; the rights inherent to article 324 of the Portuguese Companies Code.

	31.03.2020
Shareholder		No. of shares	0/0	Nominal value
Manuel Champalimaud, SGPS, S.A. (1)		19.330.084	12.887%	9.665.042
Manuel Carlos de Melo Champalimaud		353.185	0.235%	176,593
Manuel Carlos de Melo Champalimaud (1)	Total	19.683.269	13.122%	9.841.635
GreenWood Builders Fund I, LP (2)		8,814,082	5.876%	4,407,041
GreenWood Investors LLC(2)	Total	8.814.082	5.876%	4.407.041
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	6,010,417	4.007%	3,005,209
BlackRock, Inc. (4)	Total	4.496.864	2.998%	2,248,432
BBVA Asset Management, SA SGIIC (5)	Total	3.495.499	2.330%	1,747,750
BPI Gestão de Activos (6)	Total	3,044,307	2.030%	1,522,154
CTT, S.A. (own shares) (7)	Total	1	0.000%	1
Other shareholders	Total	95.962.816	63.975%	47.981.408
Total		150.000.000	100.000%	75,000,000

(1) Duarte Palma Leal Champalmaud,non-executive member of the Board of Directors of CTT, is Vice-Chairman. Qualified shareholding directly attributable to Manuel Carlos de Melo Champalimaud.
(2) GreenWood Investors, LLC, of which Steven Wood, Non-Executive member of CTT, is a Managing Member exercises the voting rights not in its own name but on behalf of the fund GreenWood Builders Fund | LP as its management company. The full chain of controlled undertakings through which the voting rights are held includes Green Wood Investors, LLC and Green Wood Performance Investors, LLC.
(3) Global Portfolio Investments, S.L. is controlled by Indumenta Pueri, S.L..
(4) The full chain of undertakings controlled by Black Rock, not the financial instruments are effectively heldis shown as attachment to the qualifying holding press release of 14 November 2019 and available on CTT website (www.ctt.pd).
(5) BBVA Asset Management, SA, SGIC exercises the voting its own name but on behalf of the funds BBVA BOLSA FLIBO FI, BBVA BOLSA EUROPA Fl and BBVA BOLSA PLUS Flas their management company, Cidessa Uno, SL is the direct controlling entity of BBVA Asset Management, SA, SGIIC.
(6) This holding corresponds to the number of shares held by Portuguese securities investment funds managed by BPI Gestão de Activos, as well as held by portfolios regarding which BPI Gestão de Activos Fundos carries out the discretionary management.
(7) 31 January 2017 and in execution Committee's approved remuneration policy for the 2014-2016 term of office and the Company's Executive Director Share Award Plan approved by the General Meeting held on 5 May 2015, a total of 600,530 own shares representing 0.400% of the share capital was awarded to the Company's Executive Directors, as long-term variable remuneration. At the present date, CTT holds thus 1 own share corresponding to 0.000% of the share capital and with the nominal value of £0.50; the rights inherent to article 324 of the Portuguese Companies Code.

15. Own shares, Reserves, Other changes in equity and Retained earnings

Own shares

The commercial legislation regarding own shares requires that a non-distributable reserve must be created for the same amount of the acquisition price of such shares. This reserve is not available for distribution while the shares stay in the Company's possession. In addition, the applicable accounting standards determine that the gains or losses obtained with the sale of such shares are recognised in reserves.

As at 31 March 2020, CTT held 1 own share, with a nominal value of 0.50€, being all the inherent rights suspended pursuant to article 324 of the Portuguese Companies Code.

Own shares held by CTT are within the limits established by the Company and by the Portuguese Companies Code. These shares are recorded at acquisition cost.

Reserves

As at 31 December 2019 and 31 March 2020, the Group's and Company's heading Reserves showed the following composition:

		31.12.2019
	Legal reserves	Own shares reserves	Fair Value reserves	Other reserves	Total
Opening balance	15.000.000	8	270	50.836.597	65,836,875
Assets fair value		-	15,720		15,720
Closing balance	15,000,000	8	15,990	50,836,597	65,852,595
			31.03.2020

	Legal reserves	Own shares reserves	Fair Value reserves	Other reserves	Total
Opening balance	15,000.000	8	15,990	50.836.597	65,852,595
Assets fair value		-	(34,501)		(34,501)
Closing balance	15,000,000	8	(18,510)	50,836,597	65,818,095

Legal reserves

The commerciallegislation establishes that at least 5% of the annual net profit must be allocated to reinforce the legal reserve, untilit represents at least 20% of the share capital. This reserve is not distributable except in the event of the Company but may be used to absorb losses after all the other reserves have been depleted or incorporated in the share capital.

Own shares reserve (CTT, S.A.)

As at 31 March 2020, 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.

Other reserves

This heading records the profits transferred to reserves that are not imposed by the law or articles of association, nor constituted pursuant to contracts signed by the Company.

Retained earnings

During the year ended 31 December 2019 and three-month period ended 31 March 2020, the following movements were made in the Group heading Retained earnings:

31.12.2019	31.03.2020

	10,867.301
21.499.271	29.196.933
(15.000.000)
(10.954)	(1.549)
	(46.047)
10,867,301	40,016,638
	4,378,984

Other changes in equity

The actuarial gains/losses associated to post-employment benefits, as well as the corresponding deferred taxes, are recognised in this heading.

Thus, for the year ended 31 December 2019 and three-month period ended 31 March 2020, the movements occurred in this heading, in the Group, were as follows:

	31.12.2019	31.03.2020
Openinq balance	(30.993.430)	(49.744.144)
Actuarial qains/losses	(25.769.253)
Tax effect (Note 25)	7.018.539
Closing balance	(49.744.144)	(49.744.144)

16. Dividends

According to the dividend distribution proposal included in the 2018 Annual Report, at the General Meeting of Shareholders, which was held on 23 April 2019, a dividend distribution of 15,000,000 Euros, corresponding to a dividend per share of 0.10 Euros, regarding the financial year ended 31 December 2018 was proposed and approved. The dividend amount assigned to own shares was transferred to Retained earnings, totalling 0.10 Euros.

At the General Meeting of Shareholders, which was held on 29 April 2020, was proposed and approved, the non-distribution of dividends regarding the year ended 31 December 2019. The net income in the amount of 29,196,933 Euros was transferred to retained earnings.

17. Earnings per share

During the periods ended 31 March 2019 and 31 March 2020, the earnings per share were calculated as follows:

	31.03.2019	31.03.2020
Net income for the period	3,698,154	3,681,542
Average number of ordinary shares	149,999,999	149.999.999
Earnings per share
Basic	0.02	0.02
Diluted	0.02	0.02

The average number of shares is detailed as follows:

	31.03.2019	31.03.2020
Shares issued at begining of the period	150.000.000	150.000.000
Own shares effect	1
Average number of shares during the period	149,999,999	149,999,999

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 31 March 2020, the number of own shares held is 1 and its average number for the year ended 31 March 2020 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.

18. Debt

As at 31 December 2019 and 31 March 2020, Debt of the Group showed the following composition:

	31.12.2019	31.03.2020
Non-current liabilities
Bank loans	81,702,538	81,933,277
Lease liabilities	66,895,396	64.093.845
	148,597,934	146,027,123
Current liabilities
Bank loans	9.749.470	9.743.479
Lease liabilities	17.064.097	18.731.809
	26,813,567	28,475,288
	175.411.501	174,502,411

As at 31 March 2020, the interest rates applied to bans were between 1.25% and 1.875% (31 December 2019: 1.25% and 1.875%).

Bank loans and other loans

As at 31 December 2019 and 31 March 2020, the details of the Group bank loans were as follows:

	31.12.2019		31.03.2020
	Limit	Amount used		Limit	Amount used
		Current	Non-current		Current	Non-current
Bank loans
Millennium BCP	11.250.000	9.749.470		11.250.000	9.743.479
BBVA / Bankinter	75.000.000		46.891.381	75.000.000		47,102,485
Novo Banco	35.000.000		34,811,157	35,000,000		34,830,793
BIM - (Mozambique)	44.870			40.928
	121,294,870	9,749,470	81,702,538	121,290,928	9,743,479	81,933,277

On 27 September 2017, a financing contract between CTT and BBVA and Bankinter was signed, for an initial period of 5 years and for a total amount of 90 million Euros, with the possibility of using the funds until September 2018. As no amount was used until the mentioned date, the contract was renegotiated on 27 September 2018, having the total amount been altered to 75 million Euros, while maintaining the one-year term for the use of the funds. Regarding 31 December 2018, the amount of 25 million Euros was used, presented in the balance sheet net of commission in the amount of 24,276,250 Euros. As at 31 March 2020 the referred amount corresponded to 47,102,485 Euros. By a company decision, the remaining available amount will not be used.

On April 22, 2019, a simple credit agreement was signed between CTT and Novo Banco for a period of 60 months, with a grace period of two years, and may be extended for a period of 24 months, for a total amount of 35 million Euros. Regarding 31 March 2020, the 35 million Euros were used and are presented in the balance sheet net of commission in the amount of 34,830,793 Euros.

Bank loans obtained are subject to compliance with financial covenants, namely clauses of Cross default, Negative Pledge and Assets Disposal's limits. Additionally, the loans obtained also require compliance with rations of Net Debt over EBITDA and financial autonomy. Compliance with financial covenants is regularly monitored by the Group and is measured by counterparties on an annual basis based on the Financial Statements as at 31 December.

Lease Liabilities

The Group presents lease liabilities which future payments, undiscounted amounts presented in the financial position, are detailed as follows:

	31.12.2019	31.03.2020
Due within 1 year	20.168.630	22.222.461
Due between 1 to 5 years	63.131.546	62.111.084
Over 5 years	14,737,518	12,020,511
Total undiscounted lease liabilities	98.037.694	96.354.057
Current	17.064.097	18.731.809
Non-current	66,895,396	64.093.845
Lease liabilities included in the statement of financial position	83.959.493	82.825.655

The amounts recognised in the income statement are detailed as follows:

	31.03.2019	31.03.2020
Lease liabilities interests (note 24)	956.648	822.982
Variable payments not included in the measurament of the lease liability	591.038	952.651

The amounts recognised in the Cash flow statement are as follows:

	31.03.2019	31.03.2020
Total of lease payments	(6,022,454)	(6,356,790)

The movement in the rights of use underlying these lease liabilities can be analysed in note 4.

19. Provisions, Guarantees provided, Contingent liabilities and commitments

Provisions

For the year ended 31 December 2019 and three-month period ended 31 March face legal proceedings and other liabilities arising from past events, the Group recognised provisions, which showed the following movement:

	31.12.2019
	Opening balance	Increases	Reversals	Utilisations	Transfers	Changes in the consolidation perimeter	PPA adjustments	Closing balance
Non-current provisions
Litigations	3,149,620	1,975,191	(1.652.175)	(691,483)	67,824			2,848,977
Restructuring	1,842,159	100,826	(863,627)	(39,610)				1.039.748
Other provisions	9.021,484	210,045	(675,510)	(2,942)	(67,824)	1,499,282	397,421	10,381,956
Sub-total - caption "Provisions (increases) / reversals'	14,013,263	2,286,062	(3,191,312)	(734,035)	-	1,499,282	397,421	14,270,681
Restructuring	1,026,902	7,504,481		(7,852,242)				679,141
Other provisions	979.174	1,826,549		(120,167)				2,685,556
	16,019,339	11,617,093	(3,191,312)	(8,706,444)	1	1,499,282	397,421	17,635,379
	Opening balance		Increases	Reversals	31.03.2020 Utilisations	Transfers	Changes in the consolidation perimeter	Closing balance
Non-current provisions
Litiqations	2.848.976		194.536	(98.468)	(119.051)	13,941		2,839,934
Restructuring	1,039,749							1,039,749
Other provisions	10,381,956		946,252	(38,619)	(1,264)	(568,895)	-	10,719,430
Sub-total - caption "Provisions (increases)/reversals"	14,270,681		1,140,788	(137,087)	(120,315)	(554,954)	-	14,599,113
Restructuring	679,141		24.728		(663.075)			40,794
Other provisions	2.685.556				(3.542)			2.682.014
	17,635,378		1.165.516	(137.087)	(786.932)	(554.954)	-	17,321,921

The net amount between increases and reversals of provisions was recorded tedin come statement under the caption Provisions, net and amounted to 146,799 Euros as at 31 March 2019 and (1,003,701) Euros as at 31 March 2020.

Litigations

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 their lawyers as well as on the mentioned lawsuits. The final amount and the timing of the outflows regarding the provision for litigations depend on the respective proceedings.

The reversal of the provision for litigations, in the amount of 1,652,175 Euros as at 31 December 2019 and 368,282 Euros as at 31 March 2020, essentially results from lawsuits whose decision, which was made known in the course of 2019 or 2020, respectively, proved to be favourable to the Group, or, not being favourable, resulted in the condemnation to pay amounts that proved to be lower than the estimated amounts (and reflected in this provision item).

Restructuring

On 19 December 2017, CTT approved an Operational Transformation Plan, which emphasises the purposes of optimising the retail network and reinforcing the HR optimisation programme. Following the maintenance, in 2018 and 2019, on the HR optimisation programme, the provision created for this purpose amounted to 40,794 Euros as at 31 March 2020, in the Group and has been recorded against the caption Staff costs in the income statement. It is expected that this provision will be substantially used in 2020.

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.

Also, within the scope of the Operation Plan, in the area of optimisation of the delivery network and mail processing operations, the Group, in the period ended 31 December 2018, created a provision for restructuring in the amount of 1,397,647 Euros which was recognised under "Provisions (increases) / reversals" in the income statement by nature. As at 31 December 2019 following an update/revision of the underlying criteria, the provision, in the Group, amounted to 1,039,748 Euros. As at 31 March 2020 the value has not been changed.

Other provisions

As at 31 March 2020 the provision, in the Group to cover any contingencies relating to labour litigation proceedings not includedin the current court proceedings related to remuneration differences and attendance bonuses that can be claimed by workers, amounts to 6,840,664 Euros (6,891,248 Euros as at 31 December de 2019). The amount of the provision corresponds to the Group's best estimate for the outflow, and it is not possible to estimate the expected moment for the outflow as it depends on the moment when proceedings are initiated by the Group's employees.

As at 31 March 2020, a provision is recognised in CTT Expresso branch in Spain to face the notification issued by the Spanish National Commission on Markets and Competition, which has now been the Spanish Audiencia Nacional (National High Court). The amount provisioned, of 1,400,000 Euros, is the evaluation carried out by its legal advisors and the Group is awaiting the outcome of the process.

The amount provisioned in 321 Crédito, S.A. amounting to 2,075,510 Euros as at 31 March 2020 (1,499,282 Euros at the acquisition date) is essentially the result of the risk assessment associated with tax contingencies.

As at 31 March 2020, in addition to the previously mentioned situations, this heading also includes in the Group:

· the amount of 71,228 Euros to cover costs of dismantlement of tangible fixed assets and/or removal of facilities and restoration of the site:
· the amount of 550,000 Euros which arise from the assessment made by the management regarding the possibility of tax contingencies;

proceeding;
the amount of 1,823,007 Euros to cover costs of operational vehicles restoration.

Guarantees provided

As at 31 December 2019 and 31 March 2020, the Grouphad provided bank guarantees to third parties as follows:

Autoridade Tributária e Aduaneira (Portuguese Tax and Customs Authority) 8,211,715 8,211,715 Contencioso Administrativo da Audiência Nacional (National Audience Administrative Litigation) and CNMC - Comission Nacional de los Mercados y la 3,148,845 3,148,845 Competencia - Espanha (National Commission on Markets and Competition - Spain) 2,033,582 PLANINOVA - Soc. Imobiliária, S.A. (Real estate company) 2,033,582 LandSearch, Compra e Venda de Imóveis (Real estate company) 1,792,886 1,792,886 381,553 O Feliz - Imobiliaria (Real estate company) 381,553 288,384 288,384 EUROGOLD (Real estate company) Courts 281,830 281,830 TIP - Transportes Intermodais do Porto, ACE (Oporto intermodal transport) 150,000 150,000 Municipalities 118,658 118,658 INCM - Imprensa Nacional da Casa da Moeda (Portuguese Mint and Official Printing 85,056 85,056













Solred (Repsol's fuel cards) 80,000 80,000
EPAL - Empresa Portuguesa de Aquas Livres (Multi-municipal System of Water Suj 68,895 68,895
Companhia Carris de Ferro de Lisboa, EM, SA (Portuguese Railway company) 55,000 55,000
ANA - Aeroportos de Portugal (Airports of Portugal) 34,000 34,000
EMEL, S.A. (Municipal company managing parking in Lisbon) 26,984 26,984
Aguas do Norte (Water Supply of the Northern Region) 23,804 23,804
Serviços Intermunicipalizados Loures e Odivelas (Inter-municipal Services of Wate 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 infrastru 16,460 16,460
Instituto de Gestão Financeira Segurança Social (Social Security Financial Manager 21,557 16,406
Other entities 16,144 16,144
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 Authorit 13,000 13,000
Lagos em Forma - Gestão desportiva, E.M., S.A. (Municipal company managing spor 11,000 11,000
Aquas do Porto, E.M (Services of Water Supply and Sanitation of the city of Porto) 10,720 10,720
ADRA - Aguas da Região de Aveiro (Services of Water Supply and Sanitation of the 10,475 10,475
SMAS Torres Vedras (Services of Water Supply and Sanitation of the city of Torres 9,910 9,910
Promodois (Real estate company) 6,273 6,273
Instituto de Segurança Social (Social Security Institute) 5,151
Consejeria Salud ( Local Health Service / Spain) 4,116 4,116
Instituto do Emprego e Formação Profissional (Employment and Professional Traini 3,718 3,719
EMARP – Empresa de Aguas e Resíduos de Portimão (Services of Water Supply and 3,100 3,100
IFADAP (National Support Institute for Farming and Fishing) 1.746 1.746 466 466
ADAM - Aguas do Alto Minho (Services of Water Supply and Sanitation of theRegion 16,991,292 16.991.290

Guarantees for lease Contracts

According to the terms of some lease contracts of the buildings occupied by the Company'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 3,826,468 Euros as at 31 December 2019 and 31 March 2020, in the Group.

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 fiscal years 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.

CTT Expresso branch in Spain provided a bank guaranty to the Sixth Section of the National Audience Administrative Litigation and to the Spanish National Commission on Markets and Competition ("Comisión Nacional de los Mercados y la Competencia") in the amount of 3,148,845 Euros, while the appeal presented by CTT Expresso branch in Spain in the National Audience in Spain proceeds.

Commitments

As at 31 December 2019 and 31 March 2020, the Group subscribed promissory notes amounting to approximately 43.7 thousand Euros and 40.9 thousand Euros, respectively, for various credit institutions intended to secure complete and timely compliance with the corresponding financing contracts.

The Groupalso assumed financial commitments (comfort letters) in the amount of 1,170,769 Euros regarding the branch of CTT Expresso in Spain which are still active as at 31 March 2020.

In addition, the Group also assumed commitments relating to real estater ents under lease contracts and rents for other leases.

The Group contractual commitments related to Tangible assets are detailed respectively in Notes 4 and 5.

20. Accounts payable

As at 31 December 2019 and 31 March 2020, the Group's heading Accounts payable showed the following composition:

	31.12.2019	31.03.2020
Current
Advances from customers	2.824.160	2,851,717
CNP money orders	87.890.044	50.625.602
Suppliers	76.261.148	74.654.046
Invoices pending confirmation	10,560,107	11,699,729
Fixed assets suppliers	14.189.288	7.241.603
Invoices pending confirmation (fixed assets)	9.543.900	6,562,976
Values collected on behalf of third parties	8.495.311	6,041,985
Postal financial services	153,139,714	58,586,532
Advances regarding disposals	14.108	14,542
Other accounts payable	10,872,886	17.169.137
	373,790,665	235.447.868
	373,790,665	235.447.868

CNP monev orders

The value of CNP money orders refers to the money orders received from the National Pensions Center (CNP), whose payment date to the corresponding pensioners will occur in the month after the financial year. The decrease observed results from the variation of the issuance dates of the money orders defined by Social Security (CNP) and the respective advance rule agreed between the two entities.

Postal financial services

This heading records mainly the amounts collected related to taxes, insurance, savings certificates and other money orders, whose settlement date should occur in the month following the end of the decrease seen is mainly due to the significant reduction observed in the subscription of savings certificates.

21. Banking clients' deposits and other loans

As at 31 December 2019 and 31 March 2020, the composition of the heading Banking clients' deposits and other loans in the Group is as follows:

	31.12.2019	31.03.2020
Sight deposits	961,771,839	1,007,382,534
Term deposits	169,581,292	182,678,924
Savings deposits	152.214.134	192.767.447
Banking clients' deposits		1,283,567,265 1,382,828,905
Other credit institutions' deposits	37.850.777
Other credit institutions' deposits	37,850,777
		1,321,418,042 1,382,828,905

The above-mentioned amounts relate to Banco CTT clients' deposits are deposits are deposits associated with current accounts and which allow the client to obtain a remuneration above the slight deposits, which can be mobilised at any time, with no subscription limit, and it is possible to schedule transfers from and for this account. These deposits are different from term deposits as they have a definite date of constitution and maturity, and the savings accounts are fully mobilizable without penalty on remuneration.

As at 31 December 2019 and 31 March 2020, the residual maturity of banking client deposits and other loans, is detailed as follows:

	31.12.2019
	No defined maturity	Due within 3 months	Over 3 months and less than 1 vear	Over 1 year and less than 3 years	Over 3 years	Total
Sight deposits and saving accounts	1,113,985,973					1,113,985,973
Term deposits		53.164.869	116,416,423			169,581,292
Banking clients' deposits	1,113,985,973	53.164.869	116.416.423			- 1.283.567.265
Other credit institutions' deposits		37.850.777				37.850.77
Other credit institutions' deposits	•	37,850,777		1		37,850,777
	1,113,985,973	53,164,869	116,416,423			- 1,321,418,042

		31.03.2020
	No defined maturitv	Due within 3 months	Over 3 months	Over 1 vear and and less than 1 less than 3 years	Over 3 years	Total
Sight deposits and saving accounts	1.200.149.981					1.200.149.981
Term deposits		96.896.178	85.782.746			182,678,924
Banking clients' deposits	1.200.149.981	96.896.178	85,782,746	1		- 1,382,828,905
Other credit institutions' deposits
Other credit institutions' deposits				1
	1.200.149.981	96.896.178	85.782.746	l		- 1.382.828.905

The caption Other credit institutions' deposits refer to sales transactions with a repurchase agreement by credit institutions abroad

22. Income taxes receivable / payable

As at 31 March 2020 the caption reflects the estimated incometax regarding 2019, which has not yet been paid, as the estimated income tax regarding the three-month period ended 31 March 2020.

Staff costs 23.

During the periods ended 31 March 2020, the composition of the Group heading Staff Costs was as follows:

	31.03.2019	31.03.2020
Remuneration	67,508,804	69,294,726
Employee benefits	54.245	1.044.698
Indemnities	4.061.211	237,497
Social Security charges	15,137,576	15,162,563
Occupational accident and health insurance	1.081.087	1.087.970
Social welfare costs	2.028.135	1.482.983
Other staff costs	65.697	8.483
	89,936,755	88.318.919

Remuneration

The change in the "Remuneration" caption arises essentially from fact that on 31 March 2020 the contribution of 321. Crédito, SA was already being considered, an acquisition that only took place in May 2019, thus not affecting the values on 31 March 2019.

As at 31 March 2019 and 31 March 2020, the fixed and variable remunerations attributed to the statutory bodies of CTT, SA, were as follows:

	31.03.2019
	Board of Directors	Audit Comittee	Board	Remuneration General Meeting of Shareholders	Total
Short-term remuneration
Fixed remuneration	771,628	55,714	13,950		841,292
Annual variable remuneration	128.938				128,938
	900,566	55.714	13,950	1	970,230
Long-term remuneration
Defined contribution plan RSP	55,750				55,750
Long-term variable remuneration	12,720				12,720
	68.470	1		-	68,470
	969,036	55,714	13,950	1	1,038,700

		31.03.2020
	Board of Directors	Audit Comittee	Board	Remuneration General Meeting of Shareholders	Total
Short-term remuneration
Fixed remuneration	631.114	47,357	13,950		692,421
Annual variable remuneration
	631,114	47,357	13,950	1	692,421
Long-term remuneration
Defined contribution plan RSP	45.887				45,887
Long-term variable remuneration
	45.887	1	1	1	45.887
	677,001	47,357	13,950		738,308

For the year ended 31 December 2019, the amount of 801,968 Euros was recognised as Annual Variable Compensation for the members of the Statutory Bodies which was determined by the Remuneration Committee supported on a study carried out by an independent entity. Due to the COVID-19 pandemic, and by resolution of the Annual General Meeting, the nonpayment of profit-sharing bonuses was approved, and the annual variable remuneration was suspended.

Employee benefits

The changeregisteredinthe caption Employee benefits mainly reflects the liability reduction related to the benefit "Telephone subscription charge'' which occurred on 31 March 2019.

Indemnities

During the period ended 31 March 2020, this caption includes manly indemnities related to the termination of employment contracts.

Social welfare cost

Social welfare costs relate almost entirely to health costs incurred by the Group with the active workers, as well as expenses related to Health and Safety at work.

As at 31 March 2019 and 31 March 2020, the Group heading Staff costs includes the amounts of 197,496 Euros and 102,423 Euros, respectively, related to expenses with workers' representative bodies.

For the year ended 31 March 2020, the average number of staff of the Group was 12,118 employees in the year ended 31 March 2019).

24. Interest expenses and Interest income

For the periods ended 31 March 2019 and 31 March 2020, the heading Interest Expenses of the Group had the following detail:

	31.03.2019	31.03.2020
Interest expenses
Bank loans	9.712	407,903
Lease liabilities	956.648	822.982
Other interest	105.108	147.095
Interest costs from employee benefits	1,307.803	1.115.146
Other interest costs	4.813	21.227
	2,384,083	2,514,353

During the periods ended 31 March 2029 and 31 March 2020, the Group heading Interest income was detailed as follows:

	31.03.2019	31.03.2020
Interest income
Deposits in credit institutions	16.803	3.143
Other supplementary income	5.366
	22.169	3.143

25. Income tax for the period

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 up to 35,000,000 Euros and 9% of the taxable profit above 35,000,000 Euros. CTT – Expresso, S.A., Spain branchis subject to incometaxes in Spain, through income tax (Impuesto sobre Sociedades - "IS") at a rate of 25%, and the subject to corporate income tax in Mozambique ("IRPC") at a rate of 32%.

Corporate income tax is levied on CTT and its subsidiaries CTT – Expresso, S.A., Payshop Portugal, S.A, CTT Contacto, S.A. and Banco CTT, S.A., through the Special Regime for the Taxation of Groups of Companies ("RETGS"). The remaining companies are taxed individually.

Reconciliation of the income tax rate

For the periods ended 31 March 2019 and 31 March 2020, the reconciliation between the nominal rate and the effective income tax rate of the Group was as follows:

	31.03.2019	31.03.2020
Earnings before taxes (a)	6.603.407	6.196.447
Nominal tax rate	21.0%	21.0%
	1,386,715	1,301,254

Tax Benefits	(86,818)	(98,465)
Accounting capital gains/ (losses)	(3,724)	(124,035)
Tax capital gains / (losses)	2.435	71,071
Equity method		117.172
Provisions not considered in the calculation of deferred taxes	(1,139)	5,115
Impairment losses and reversals	36.856	62,380
Compensation for insurable events	34,429	21,070
Depreciation and car rental charges	14,886	3,887
Credits uncollectible	1,684	5,658
Fines, interest, compensatory interest and other charges	1,148	4,167
Other situations, net	488,515	97,638
Adjustments related with - autonomous taxation	118,672	165,276
Tax losses without deferred tax	538,322
Insuficiency / (Excess) estimated income tax		101,714
Subtotal (b)	2,531,981	1,733,902
(b)/(a)	38.34%	27.98%

Adjustments related with - Municipal Surcharge	109,288	197,558
Adjustments related with - State Surcharge	271,746	553.732
Income taxes for the period	2,913,015	2,485,192
Effective tax rate	44.11%	40.11%
Income taxes for the period
Current tax	(306.283)	2.189.533
Deferred tax	3,219,298	397,373
Insuficiency / (Excess) estimated income tax		(101.714)
	2,913,015	2,485,192

In the three-month period ended 31 March 2020, the heading "Insufficiency / (Excess) estimated income tax" refers essentially to the excess of the IRC estimate for the year 2018.

Deferred taxes

As at 31 December 2019 and 31 March 2020, the balance of the Group deferred tax assets and liabilities was composed as follows:

	31.12.2019	31.03.2020
Deferred tax assets
Employee benefits - healthcare	76,839,990	76.730,521
Employee benefits - pension plan	84.668	83.459
Employee benefits - other long-term benefits	2,868,626	2,671,428
Impairment losses and provisions	5,032,656	3,155,016
Tax losses carried forward	1,289,985	1,289,985
Impairment losses in tangible fixed assets	385,810	404.890
Land and buildings	356,809	356.809
Tangible assets' tax revaluation regime	1,924,292	1,844,113
Other	546.970	2,292,520
	89,329,806	88,828,741
Deferred tax liabilities
Revaluation of tangible fixed assets before IFRS	2.137.282	2.087.130
Suspended capital qains	718.036	711.201
Non-current assets held for sale	83.010	83.010
Other	19.787	19.787
	2,958,115	2,901,128

The deferredtax assetrelated to Tangible assets tax revaluation regime was recognised following the Companies accession to the regime established in Decree-Law no. 66/2016, of 3 November. In the year ended 31 March 2020 the deferred tax asset amounts to 1,844,113 Euros.

As at 31 March 2020, 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, regarding the Group.

During the year ended 31 December 2019 and three-month period ended 31 March 2020, the movements which occurred under the deferred tax headings of the Group were as follows:

	31.12.2019	31.03.2020
Deferred tax assets
Opening balances	81,734,114	89,329,806
Changes in the consolidation perimeter	1.679.394
Effect on net profit
Employee benefits - healthcare	(664,362)	(109,469)
Employee benefits - pension plan	(10,581)	(1,209)
Employee benefits – other long-term benefits	223.382	(197.198)
Impairment losses and provisions	(287,039)	(201,001)
Tax losses carried forward	(2,904)
Impairment losses in tanqible fixed assets	102,337	19,080
Land and buildings	(95,203)
Tangible assets' tax revaluation regime	(320,715)	(80,179)
Other	(47,157)	68,911
Effect on equity
Employee benefits - healthcare	7,000,770
Employee benefits - pension plan	17,769
Closing balance	89,329,806	88,828,741

	31.12.2019	31.03.2020
Deferred tax liabilities
Opening balances	3,108,662	2,958,115
Changes in the consolidation perimeter	83,010
Effect on net profit
Revaluation of tangible fixed assets before IFRS adoption	(200,606)	(50,152)
Suspended capital qains	(27,341)	(6.835)
Other	(5.610)
Closing balance	2,958,115	2,901,128

The tax losses caried forward are related to the subsidiaries Tourline and Transporta which were merged by incorporation into CTT Expresso, S.A. and are detailed as follows:

Company	Tax losses	Deferred tax assets
CTT - Expresso, S.A., branch in Spain	61.016.826
CTT Expresso/Transporta	6,142,786	1,289,985
Total	67,159,612	1,289,985

Regarding CTT – Expresso, S.A., branch in Spain (prior 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 forwardin the next 18 years and the tax losses of the years 2015, 2016, 2017 and 2018 have no time limit for deduction. Regarding CTT Expresso the tax losses refer to the years 2017 and 2018 of the company Transporta, which was mergedin CTT Expresso during the year 2019 and may be carried forward in the next 5 years.

The sensitivity analysisperformed 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 2.2 million Euros in the Group.

SIFIDE

The Group's policy for recognition of fiscal credits regarding SIFIDE is to recognise the credit at the effective receipt from the commission certification statement, certifying the eligibility of expenses presented in the applications for tax benefits.

For the year ended 31 December 2018 the expenses incurred with R&D, of 737,089 Euros the Group will have the possibility of benefiting from a tax deduction in corporate income tax estimated at 248,131 Euros.

For the year ended 31 December 2019 the expenses incurred with R&D, of 1,063,800 Euros the Group will have the possibility of benefiting from a tax deduction in corporate income tax estimated at 443,571 Euros.

Other information

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 2017 and onwards may still be reviewed and corrected.

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 consolidated financial statements as at 31 March 2020.

26. Related parties

The Regulation on Assessment and Control of transactions with CTT related party as: qualified shareholder, manager or third party with any of these related through relevant commercial or personal interest (under the terms of IAS 24) and also subsidiaries, associates and joint ventures of CTT. It is considered that there is a "relevant commercial or personal interest" in relation to (i) close family members and qualified shareholder(s) who, at each moment, have significant influence (as defined above) on CTT, as well as (ii) controlled entities (individually or jointly), either by management, qualified shareholders or by the persons referred to in (i). For this purpose, "control" is considered to exist when the party has, directly or indirectly, the power to guide the financial and operational policies of an entity in order to obtain benefits from its activities. Additionally, "close family members" are: (i) the spouse or domestic partner and (ii) the children and dependents of the person and persons referred to in (i).

According to the Regulation, the significant transactions with related parties, as well as transactions that members of the Board of Directors of CTT and /or its subsidiaries conduct with CTT and/or its subsidiaries, must be previously approved by the Audit Committee of CTT.

The other related parties ' transactions are communicated to the purpose of subsequent examination.

During the periods ended 31 March 2020, the following transactions took place and the following balances existed with related parties, regarding the Group:

			31.03.2019
		Accounts receivable	Accounts payable	Revenues	Costs	Dividends
Shareholders
Group companies
Associated companies		5,603	3.130	3.053	1.707
Jointly controlled		1,010,641		75,283		1
Members of the	(Note 23)
Board of Directors				1	900,566
Audit Committee					55.714
Remuneration Committee			1	1	13.950	1
General Meeting						1
		1 016 243	2 1 20	78 225	971 937	I

		31.03.2020
		Accounts receivable	Accounts payable	Revenues	Costs	Dividends
Shareholders					1	1
Group companies
Associated companies		4.970	8,196	3,112	24.841
Jointly controlled		205.061		203,363		1
Members of the	(Note 23)
Board of Directors					631,114	1
Audit Committee					47.357	1
Remuneration Committee				1	13.950	1
General Meeting						1
		210.030	8.196	206.475	717,262	-

In the context of transactions with related parties, no commitments were made, nor were any guarantees given or received in addition to the comfort letters assumed regarding CTT Expresso, branch in Spain, mentioned in Note 19.

No provision was recognised for doubtful debts or expenses recognised during the period in respect of bad or doubtful debts owed by related parties.

The transactions and balances between subsidiaries are eliminated in the consolidation process and are not disclosed in this note

27. Other information

Under the Universal Postal Service Concession Contract, on 13.03.2020, CTT invoked force majeure the Regulator, following the public health emergency of international scope, declared by the World Health Organization on 30.01.2020 and the subsequent classification of COVID-19 as a pandemic, on 11 March. In view of the seriousness and magnitude of the facts, which are public and notorious, and in order to comply with the public health instructions issued by the competent authorities, CTT could not fail to take the necessary and appropriate measures to protect workers and customers.

Pursuant to the provisions of the concession contract, CTT continues to ensure the functioning of postal services, taking the necessary and appropriate measures to the situation of force majeure, in terms of planning, operation prevention and human resources, submitting a daily update of the Government, as a counterparty, and to ANACOM, the regulatory authority responsible for overseeing the provision of universal postal service.

The legal proceedings relating to the ANACOM regarding the parameters of quality of service and performance objectives applicable to the provision of the universal postal service, issued in July 2018, are subject to their terms. In the arbitral action brought against the Portuguese State, as grantor, is in the stage of producing evidence. In the administrative proceedings brought against ANACOM, the same decision and the second concerning the December 2018

determination regarding the new measurement procedures to the indicators, there were no relevant developments.

The process related to the proposal of the application of 11 contractual fines, initiated in 2018, within the Universal Postal Service Concession Agreement, based on alleged breaches of obligations resulting from the contract which occurred during 2015, 2016 and 2017, is pending a decision following the additional submission of evidence determined by the grantor.

The administrative proceedings for the alleged violation to have a hard copy of the complaints book in the establishments operating on behalf of CTT and the alleged breach of the obligation to immediately provide at no cost the complaints book to the users who requested it, had no significant developments.

Following ANACOM's decision onthe 2016 cost accounting system results, under which new criteria for the allocation of costs between the postal activity and the banking activity of the Company were identified, and specified that the cost accounting system for the 2016 and 2017 financial years in this regard should be restated, CTT submitted the results regarding those years as well as the results of the 2018 according to the new criteria, as determined. Audits for the three financial years are ongoing.

The precautionary measures filed by several Intermunities or by Municipalities following the process of transformation of Post Offices into Postal Agencies, covering situations where only a single post office exists in a county seat, were all dismissed, or considered that there was no need to adjudicate.

COVID-19 Impact

On 11 March 2020, the World Health Organization declared the public health emergency caused by the COVID-19 disease as a pandemic. This situation has evolved very rapidly and measures have been taken internationally to severely restrict the rights of free movement and economic freedom, thus seeking to prevent the virus. Several governments, authorities and economic agents are implementing a series of initiatives with a very relevant impact on the populations and on the global and national economic activity, while the State of Emergency was declared in Portugal on 18 Marchlast. The COVID-19 pandemic affected consumers and, although the Group has maintained its activity and has been associated from the outset with the "stay at home" movement in the various geographies where it operates and carried out various initiatives aimed at facilitating access for all to the services provided, business has generally been negatively influenced.

Due to the context of uncertainty, in the Annual General Meeting of 29 April CTT decided to suspend the 2019 dividend and allocate the 2019 net profit to Retained Earnings, as well as suspend the payment of the 2019 variable remuneration. The Group also implemented additional measures to strengthen its financial position and ensure its operational response, while seeking to preserve the value of traditional businesses and invest in new ones, more linked to digital platforms and e-commerce.

Regarding the impacts on the financial statements as at 31 March 2020, the effect on the Group's revenues should be noted. The Mail business unit was particularly affected, with greater relevance in the E&P business unit was also impacted, especially in Spain, with several initiatives launched in Portugal to help companies market their products. The Financial Services & Retail business unit suffered the greatest impact, with a significant reduction in Public Debt Certificates subscriptions. In March, the impacts on Banco CTT business unit were not so significant.

The Group also carried out the following additional reviews in the context of the pandemic:

reviewed the expected credit losses ("ECL") to be applied to the amounts receivable and bank deposits as at 31 March 2020, with no relevant changes as at 31 December 2019;
reviewed the impact of the moratoria granted by Banco CTT and 321 Credito on the impairment of their loan portfolios, with no relevant impact being recorded as at 31 March 2020;

analysed whether there were additional signs of impairment due to COVID-19, which could indicate the existence of impairment of non-current assets, and no additional impairments to be recognized were identified;
reviewed the existence of onerous contracts due to the current situation, and no contracts were identified that should be considered as onerous contracts:
· recognised incremental costs associated with COVID-19, namely concerning individual protective equipment, of around 0.1 million euros.

As at 31 March 2020, the Group had not received any State aid or subsidy associated with COVID-19.

As CTT has been ensuring the continuity of its operations, the impact of COVID-19 on business growth and profitability cannot be reliably quantified, because it is extremely difficult to ascertain it with a reasonable degree of cent depends on the duration of the pandemic and the severity of its impacts on the international and the domestic economy.

28. Subsequent events

Afterthe end of the year and up to the present date, no relevant or material facts have occurred in the Group's activity that have not been disclosed in the notes to the financial statements.

AI Terminal

CTT-Correios de Portugal

1911_iss_2020-05-06_08087cc4-af81-4f8b-a49a-dc6acef9ee0c.pdf

Consolidated Results

committed to deliver

TABLE OF CONTENTS

CTT - Correios de Portugal, S.A. - Public Company 1 st QUARTER 2020 CONSOLIDATED RESULTS

Consolidated Results

1. Operational and Financial Performance

Mail

Mail volumes

Express & Parcels

Banco CTT

Financial Services & Retail

Operating Costs

Operating Costs

Staff

EBITDA

Specific Items

EBIT and Net Profit

EBIT by business unit

Financial Results

Investment

Cash flow

Cash flow

Consolidated Balance Sheet

Consolidated Balance Sheet

Consolidated Balance Sheet excluding Banco CTT

Liabilities related to employee benefits

Consolidated net debt

Consolidated net debt

Consolidated net debt excluding Banco CTT

2. Other Highlights

CHANGES TO THE INFORMATION REPORTING STRUCTURE

Mail & Other Business Unit

Financial Services & Retail Business Unit

REGULATORY ISSUES

DIVIDENDS / BONUS

OUTLOOK FOR THE 2020 FINANCIAL YEAR

Final Note

CTT - Correios de Portugal, S.A.

Disclaimer

Forward-looking statements

3 months report 2020

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CIT-CORREIOS DE PORTUGAL. S.A.

CTT - CORREIOS DE PORTUGAL, S.A.

TABLE OF CONTENTS

Introduction 1.

2. Significant accounting policies

2.1 Basis of presentation

u Segment reporting

Debt by segment is detailed as follows:

4.

Buildings and other constructions:

Basic equipment:

Other tangible fixed assets:

Tangible fixed assets in progress:

Rights of Use

Intangible assets 5.

6. Investment properties

7.

Subsidiary companies

Joint ventures

Associated companies

Structured entities

00 Debt securities

9. Other banking financial assets and liabilities

lnvestments in credit institutions and Loans to credit institutions

lmpairment

Debt securities issued

10. Credit to banking clients

lmpairment losses

Deferrals 11.

12. Cash and cash equivalents

Impairment

13. Accumulated impairment losses

14. Equity

15. Own shares, Reserves, Other changes in equity and Retained earnings

Own shares