MaltaPost Plc

Earnings Release • May 16, 2018

COMPANY ANNOUNCEMENT

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

QUOTE

At a meeting of the Board of Directors of MaltaPost p.l.c. held on 16 May 2018, the Board approved the attached Unaudited Condensed Consolidated Interim Financial Statements for the six month period ended 31 March 2018.

These Unaudited Condensed Consolidated Interim Financial Statements for the period ended 31 March 2018, are available for viewing and download from the Company's website www.maltapost.com

UNQUOTE

Graham A. Fairclough Company Secretary

16 May 2018

Review of Performance

For the six months ended 31st March 2018, MaltaPost registered a profit before tax of €1.3 million (2017: €1.8 million):

• · Revenue increased to €24.2 million (2017: €17.6 million) following positive trends in foreign mail activity, parcels business and document management services;
• · As volumes reached higher levels, related costs also increased resulting in a total expenditure of €23.0 million (2017: €15.9 million);
• · The increased revenue from foreign mail activity was dampened by a higher than normal proportionate increase in expense related to that activity. This resulted in a lower margin;
• · Following the rise in foreign mail activity, as well as the timing of related receipts, receivables increased significantly. Likewise the related costs and timing of payments resulted in a corresponding increase in payables;
• · Total Assets rose by 23.4% to €51.2 million (2017: €41.5 million);
• · Shareholders' funds remained at a stable level of €22.9 million (2017: €23.6 million).

The local postal market continues to be highly challenging as tariffs, determined by the Universal Service Obligations, have stood unchanged for the past 4 years while related expenses, especially salaries and wages, continued to rise. In an industry that is highly labour intensive the recruitment of suitable human resources also presents a problem.

Volumes in local Letter Mail continued to decline rendering the whole delivery process less and less cost-effective. However, potential for further growth is seen in the packet and parcel business, though only within a highly competitive market.

Outlook

While MaltaPost remains committed to improve operational efficiency and manage costs, reasonable and timely pricing reviews are essential to ensure continued viability of its responsibilities under the Universal Service Obligations. In comparative terms, the tariff of mail services in Malta remains the lowest in the EU.

The Directors are confident that the Company continues on the right track to provide suitable employment conditions to its staff, a quality service to its customers and a fair return on investment to its shareholders.

Basis of preparation

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting, have been extracted from the Group's unaudited accounts for the six months ended 31 March 2018 and have been reviewed in terms of ISRE 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". The half-yearly results are being published in terms of Chapter 5 of the Listing Rules of the Malta Financial Services Authority.

The interim financial information should be read in conjunction with the annual financial statements for the year ended 30 September 2017, which have been prepared in accordance with International Financial Reporting Standards as adopted by the EU.

Accounting policies

The accounting policies applied are consistent with those of the annual financial statements of MaltaPost p.l.c. for the year ended 30 September 2017, as described in those financial statements. Adoption of new standards, amendments and interpretations to existing standards that are mandatory for the Group's accounting period beginning on 1 October 2017 did not result in changes to the Group's accounting policies.

Fair values of financial assets and liabilities

The Group's financial instruments, which are measured at fair value, comprise the Group's availablefor-sale financial assets. The Company is required to disclose fair value measurements by level of the following fair value measurement hierarchy for financial instruments that are measured in the statement of financial position at fair value:

• · Quoted prices (unadjusted) in active markets for identical assets (Level 1).
• · Inputs other than quoted prices included within Level 1 that are observable for the assets either directly i.e. as prices, or indirectly i.e. derived from prices (Level 2).
• · Inputs for the asset that are not based on observable market data i.e. unobservable inputs (Level 3)

As at 31 March 2018 and 30 September 2017, available-for-sale investments were valued using Level 1 inputs in view of the listing status of the assets and accordingly no transfers between different levels of the fair value hierarchy have occurred.

The fair values of all the Group's other financial assets and liabilities that are not measured at fair value are considered to approximate their respective carrying values due to their short-term nature.

MaltaPost p.l.c. Preliminary Statement of Half yearly Results For the six months ended 31 March 2018

Condensed Consolidated Interim Statement of Financial Position As at 31 March 2018

		Group
	31 Mar 2018 € 000 Unaudited	30 Sep 2017 € 000 Unaudited
ASSETS
Property, plant and equipment Available-for-sale financial assets Deferred tax asset	14,773 3,870 603	14,390 3,613 611
Total non-current assets	19,246	18,614
Current assets Inventories Trade and other receivables Deposits with financial institutions Cash and cash equivalents	708 24,847 2,014 4,484	758 11,272 2,014 8,854
Total current assets	32,053	22,898
Total assets	51,299	41,512
EQUITY AND LIABILITIES Capital and reserves Share capital Share premium Other reserves Retained earnings	9,414 7,367 (27) 6,227	9,414 7,367 (20) 6,879
Total equity	22,981	23,640
Non-current liabilities Deferred tax liability Provision for liabilities and charges Total non-current liabilities	777 1,995 2,772	777 2,047 2,824
Current liabilities
Trade and other payables Current tax liability	25,126 420	14,819 229
Total current liabilities	25,546	15,048
Total liabilities	28,318	17,872
Total equity and liabilities	51,299	41,512

The condensed interim financial statements were approved by the Board of Directors on 16 May 2018 and were signed by:

Sam Joseph Said V Chairman

Aurelio Theuma Director

Condensed Consolidated Interim Income Statement For the six months ended 31 March 2018

	Group
	01 October to 31 March
	2018	2017
	€ 000	€'000
	Unaudited	Unaudited
Revenue	24,225	17,646
Employee benefits expense	(7,257)	(6,799)
Depreciation and amortisation expense	(444)	(370)
Other expenses	(15,319)	(8,736)
Operating profit	1,205	1,741
Finance income	85	72
Profit before tax	1,290	1,813
Tax expense	(434)	(630)
Profit for the year	856	1,183
Earnings per share	€0.02	€0.03

Condensed Consolidated Interim Statement of Comprehensive Income

	Group
	01 Oct 17 to 31 March 18 € 000 Unaudited	01 Oct 16 to 31 March 17 €'000 Unaudited
Comprehensive income
Profit for the year	856	1,183
Other comprehensive income
Items that may be subsequently reclassified to profit or loss Available-for-sale financial assets
Gains/(losses) from changes in fair value	9	(110)
Items that will not be reclassified to profit or loss Remeasurements of defined benefit obligations	(25)	62
Income tax relating to components of other comprehensive income: Remeasurements of defined benefit obligations	9
Total other comprehensive income for the year	(7)	(48)
Total comprehensive income for the year	849	1,135

Condensed Consolidated Interim Statement of Changes in Equity For the six months ended 31 March 2018 (Unaudited) Group

	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 financial period				1,183	1,183
Other comprehensive income Available-for-sale financial assets: Loss from changes in fair value Remeasurements of defined benefit obligations			(110)		(110)
Total other comprehensive income			62 (48)		62 (48)
Total comprehensive income			(48)	1,183	1,135
Transactions with owners Allotment of shares	167	1,069			1,236
Dividends				(1,481)	(1,481)
Total transactions with owners	167	1,069		(1,481)	(245)
Balance at 31 March 2017	9,414	7,367	287	6,047	23,115
Balance at 1 October 2017	9,414	7,367	(20)	6,879	23,640
Comprehensive income Profit for the financial period				856	856
Other comprehensive income Available-for-sale financial assets: Gains from changes in fair value Remeasurements of defined benefit obligations			9 (16)		9 (16)
Total other comprehensive income			(7)		(7)
Total comprehensive income			(7)	856	849
Transactions with owners Dividends				(1,508)	(1,508)
Total transactions with owners				(1,508)	(1,508)
Balance at 31 March 2018	9,414	7,367	(27)	6,227	22,981

Condensed Consolidated Interim Statement of Cash Flows For the six months ended 31 March 2018 (Unaudited)

	Group
	01 October to 31 March 2018 €'000	2017 €'000
Cash flows from operating activities Cash from customers Cash paid to suppliers and employees Cash flows attributable to funds collected on behalf of third parties	10,231 (11,618) (60)	14,858 (12,841) (304)
Cash from operating activities Income tax paid	(1,447) (234)	1,713 (176)
Net cash generated from operating activities	(1,681)	1,537
Cash flows from investing activities Finance income Purchase/ (disposal) of property, plant and equipment Purchase of financial assets Proceeds from disposals/redemptions of financial assets	83 (1,014) (504) 250	90 (686) (1) 435
Net cash used in investing activities	(1,185)	(162)
Cash flows from financing activities Dividends paid	(1,504)	(244)
Net cash used in financing activities	(1,504)	(244)
Net movement in cash and cash equivalents	(4,370)	1,131
Cash and cash equivalents at beginning of year	8,854	8,795
Cash and cash equivalents at end of year	4,484	9.926

Statement pursuant to Listing Rules issued by the Listing Authority

I confirm that to the best of my knowledge:

• · The condensed consolidated interim financial statements, prepared in accordance with IAS 34 give a true and fair view of the financial position as at 31 March 2018, financial performance and cash flows for the period then ended, and conform with the requirements of the accounting standards adopted for use in the EU for interim financial statements, including adopted IAS 34: Interim Financial Reporting; and
• · The interim directors' report includes a fair review of the information required in terms of the Listing Rules.

Joseph Gafa' Chief Executive Officer

Independent auditor's report on the Review of Condensed Consolidated Interim Financial Information

To the Board of Directors of MaltaPost p.l.c.

Introduction

We have reviewed the accompanying condensed consolidated interim statement of financial position of MaltaPost p.l.c. and its subsidiary ("the Group") as at 31 March 2018, the related consell position of
interim income statement and statements of comprehens with related cond interim income statement and statements of comprehensive income, changes in equity and cash flower six-month period then ended (the interim financial information'). The directors are responsible for the preparation and fair presentation of this interim financial in accordance are responsible for the Financial Reporting Standards (IFRSs) as adonted by the EU applicable to interim financial reporting (International Accounting Standard 34 'Interim Financial Reporting'). Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the International Standard on Review Links, Statist of financial information consists of making inquires, primarily of persons responsible for finter accounting matters, and applying analytical and other review procedures. A review is and and scope than an audit conducted in accordance with international Standards on Auditing and consequently does not enable us to obtain assurance while me would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consoliated information in the causes us to believe that the accompanying
with International Accounting Standard of Interior is not prepared, in accordance with International Accounting Standard 34 'Interim Financial Reporting'.

PricewaterhouseCoopers

78 Mill Street Qormi QRM 3101 Malta

Fabio Axis Partner 16 May 2018

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