MaltaPost Plc

Earnings Release • Dec 11, 2017

COMPANY ANNOUNCEMENT

The following is a Company Announcement issued by MaltaPost p.l.c. pursuant to the Malta Financial Services Authority Listing Rules:

QUOTE

The Board of Directors of MaltaPost p.l.c. approved the audited financial statements for the financial year ended 30 September 2017 and resolved that these statements be submitted for approval at the forthcoming Annual General Meeting to be held on 9 February 2018. The attached Preliminary Statement of annual results is being published in terms of the Listing Rules.

The Board of Directors further resolved to recommend for the approval of the Annual General Meeting:

• 1. The payment of a final Gross Dividend of €0.0615 (Net: €0.04) per nominal €0.25 share.
• 1. Shareholders shall receive the Dividend either by direct transfer or by cheque.

The Dividend, if approved at the Annual General Meeting, will be paid on 9 March 2018 to shareholders on the Company's share register at the Central Securities Depository of the Malta Stock Exchange as at close of business on 9 January 2018.

Shareholders on the Company's share register at the Central Securities Depository of the Malta Stock Exchange, as at close of business on 9 January 2018 will receive notice of the Annual General Meeting together with the Financial Statements for the financial year ended 30 September 2017.

UNQUOTE

Graham A. Fairclough Company Secretary

11 December 2017

These financial statements have been extracted from the Annual Report of the MaltaPost p.l.c. Group (the Group) for the financial year ended 30 September 2017, audited by PricewaterhouseCoopers and approved by the Board of Directors on 11 December 2017. They were prepared in accordance with the provisions of the Companies Act, 1995, and International Financial Reporting Standards as adopted by the EU.

Review of Financial Performance and Commentary

The Group ended its financial year 30 September 2017, with a profit before tax of €3.1 million, a 4.1% increase over the previous year (€2.9 million). The key indicators for the Company's performance follow:

• Growth of services related to international mail, parcels business and document management, contributed to higher revenue of €38.4 million (2016: €28.0 million);
• Foreign direct mail costs increased in line with revenue and together with increases in staff costs resulted in higher expenditure of €35.5 million (2016: €25.1 million);
• Cost to income ratio stood at 92.1% (2016: 89.5%);
• Total assets increased to €41.5 million (2016: €36.3 million);
• Shareholders' funds reached €23.6 million (2016: €22.2 million).

Outlook

During FYE2017, MaltaPost remained focused on its core business while also seeking to implement its diversification strategy. It continued to seek new opportunities so as to ensure sustainable growth while remaining the trusted postal and logistics operator offering a comprehensive product portfolio.

The constant decline in Letter Mail business coupled with the Universal Service Obligations continue to weigh heavily on profitability. These, together with availability of suitable delivery staff also pose challenges. Consequently, further investment in technical resources together with cost-efficiency measures were implemented, resulting in operational and customer service enhancement. The impact of these measures is reflected in the financial results.

Notwithstanding these challenges the Group continues to move ahead while providing a satisfactory return to its shareholders, a quality service to its customers and fair and reasonable working conditions to all its staff. The Board of Directors remains confident of the Company's prospects while continuing to drive its efforts towards further diversification and improvement of its core services.

MaltaPost p.l.c. Preliminary Statement of Annual Results for year ended 30 September 2017

Statements of financial position

		Company
As at 30 September
2017 €'000	2016 €'000	2017 €'000	2016 €'000
14,390	13,771	14,390	13,771 1
3,613 611	4,156 338	3,613 611	4,156 338
18,614	18,265	18,615	18,266
			799
			6,926
			1,550
			8,786
22,898	18,062	22,871	18,061
41,512	36,327	41,486	36,327
			9,247
			6,298
			335
6,879	6,345	6,878	6,345
23,640	22,225	23,639	22,225
			777
2,047	1,646	2,047	1,646
2,824	2,423	2,824	2,423
			11,370
229	309	229	309
15,048	11,679	15,023	11,679
17,872	14,102	17,847	14,102
41,512	36,327	41,486	36,327
	- 758 11,272 2,014 8,854 9,414 7,367 (20) 777 14,819	Group - 799 6,926 1,550 8,787 9,247 6,298 335 777 11,370	1 758 11,272 2,014 8,827 9,414 7,367 (20) 777 14,794

Income statements

	Group		Company
	Year ended 30 September
	2017	2016	2017	2016
	€'000	€'000	€'000	€'000
Revenue	38,438	27,916	38,441	27,916
Employee benefits expense	(13,830)	(12,333)	(13,531)	(12,333)
Depreciation and amortisation expense	(789)	(849)	(789)	(849)
Other expenses	(20,910)	(11,968)	(21,214)	(11,968)
Operating profit	2,909	2,766	2,907	2,766
Finance income	145	168	145	168
Profit before tax	3,054	2,934	3,052	2,934
Tax expense	(1,041)	(871)	(1,040)	(871)
Profit for the year	2,013	2,063	2,012	2,063
Earnings per share	€0.05	€0.06

Statements of comprehensive income

	Group		Company
	Year ended 30 September
	2017 €'000	2016 €'000	2017 €'000	2016 €'000
Comprehensive income Profit for the year	2,013	2,063	2,012	2,063
Other comprehensive income Items that may be subsequently reclassified to profit or loss Available-for-sale financial assets: (Losses)/gains from changes in fair value	(132)	78	(132)	78
Items that will not be reclassified to profit or loss Remeasurements of defined benefit obligations	(528)	(74)	(528)	(74)
Income tax relating to components of other comprehensive income: Reamesurements of defined benefit obligations	305	-	305	-
Total other comprehensive income for the year	(355)	4	(355)	4
Total comprehensive income for the year	1,658	2,067	1,657	2,067

Statements of changes in equity

Group	Attributable to equity shareholders
	Share capital €'000	Share premium €'000	Other reserves €'000	Retained earnings €'000	Total €'000
Balance at 1 October 2015	9,077	5,244	331	5,734	20,386
Comprehensive income Profit for the year	-	-	-	2,063	2,063
Other comprehensive income Available-for-sale financial assets: Gains from changes in fair
value Remeasurements of defined benefit obligations	- -	- -	78 (74)	- -	78 (74)
Total other comprehensive income	-	-	4	-	4
Total comprehensive income	- -	- -	4 4	- 2,063	4 2,067
Transactions with owners Allotment of shares Dividends	170 -	1,054 -	- -	- (1,452)	1,224 (1,452)
Total transactions with owners	170	1,054	-	(1,452)	(228)
Balance at 30 September 2016	9,247	6,298	335	6,345	22,225

Statements of changes in equity - continued

Group	Attributable to equity shareholders
	Share capital €'000	Share premium €'000	Other reserves €'000	Retained earnings €'000	Total €'000
Balance at 1 October 2016	9,247	6,298	335	6,345	22,225
Comprehensive income Profit for the year	-	-	-	2,013	2,013
Other comprehensive income Available-for-sale financial assets:
Losses from changes in fair value	-	-	(132)	-	(132)
Remeasurements of defined benefit obligations	-	-	(223)	-	(223)
Total other comprehensive income	-	-	(355)	-	(355)
Total comprehensive income	-	-	(355)	2,013	1,658
Transactions with owners Allotment of shares Dividends	167 -	1,069 -	- -	- (1,479)	1,236 (1,479)
Total transactions with owners	167	1,069	-	(1,479)	(243)
Balance at 30 September 2017	9,414	7,367	(20)	6,879	23,640

Statements of changes in equity - continued

Company	Attributable to equity shareholders
	Share capital €'000	Share premium €'000	Other reserves €'000	Retained earnings €'000	Total €'000
Balance at 1 October 2015	9,077	5,244	331	5,734	20,386
Comprehensive income Profit for the year	-	-	-	2,063	2,063
Other comprehensive income Available-for-sale financial assets: Gains from changes in fair
value	-	-	78	-	78
Remeasurements of defined benefit obligations	-	-	(74)	-	(74)
Total other comprehensive income	-	-	4	-	4
Total comprehensive income	- -	- -	4 4	- 2,063	4 2,067
Transactions with owners Allotment of shares Dividends	170 -	1,054 -	- -	- (1,452)	1,224 (1,452)
Total transactions with owners	170	1,054	-	(1,452)	(228)
Balance at 30 September 2016	9,247	6,298	335	6,345	22,225

Statements of changes in equity - continued

Company	Attributable to equity shareholders
	Share capital €'000	Share premium €'000	Other reserves €'000	Retained earnings €'000	Total €'000
Balance at 1 October 2016	9,247	6,298	335	6,345	22,225
Comprehensive income Profit for the year	-	-	-	2,012	2,012
Other comprehensive income Available-for-sale financial assets: Losses from changes in fair value	-	-	(132)	-	(132)
Remeasurements of defined benefit obligations	-	-	(223)	-	(223)
Total other comprehensive income	-	-	(355)	-	(355)
Total comprehensive income	-	-	(355)	2,012	1,657
Transactions with owners Allotment of shares Dividends	167 -	1,069 -	- -	- (1,479)	1,236 (1,479)
Total transactions with owners	167	1,069	-	(1,479)	(243)
Balance at 30 September 2017	9,414	7,367	(20)	6,878	23,639

Statements of cash flows

	Group		Company
		Year ended 30 September
	2017 €'000	2016 €'000	2017 €'000	2016 €'000
Cash flows from operating activities Cash from customers Cash paid to suppliers and employees	31,974 (31,629)	29,999 (25,945)	31,974 (31,656)	29,999 (25,946)
Cash flows attributable to funds collected on behalf of third parties	2,498	115	2,498	115
Cash from operating activities Income tax paid	2,843 (1,088)	4,169 (935)	2,816 (1,088)	4,168 (935)
Net cash generated from operating activities	1,755	3,234	1,728	3,233
Cash flows from investing activities Finance income	158	185	158	185
Purchase of property, plant and equipment Purchase of financial assets Proceeds from disposals/redemptions of	(1,545) (27)	(1,100) (533)	(1,545) (27)	(1,100) (533)
financial assets Maturity of deposits with financial institutions	435 (464)	231 -	435 (464)	231 -
Net cash used in investing activities	(1,443)	(1,217)	(1,443)	(1,217)
Cash flows from financing activities Dividends paid	(244)	(228)	(244)	(228)
Net cash used in financing activities	(244)	(228)	(244)	(228)
Net movement in cash and cash equivalents	68	1,789	41	1,788
Cash and cash equivalents at beginning of year	8,786	6,998	8,786	6,998
Cash and cash equivalents at end of year	8,854	8,787	8,827	8,786