MaltaPost Plc

Interim Report • May 28, 2024

COMPANY ANNOUNCEMENT

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

QUOTE

At a meeting of the Board of Directors of MaltaPost p.l.c. held on 28 May 2024, the Board approved the attached Unaudited Condensed Consolidated Interim Financial Statements for the six-month period ended 31 March 2024.

These Unaudited Condensed Consolidated Interim Financial Statements for the period ended 31 March 2024, are available for viewing and download from the Company's website www.maltapost.com

UNQUOTE

Graham A. Fairclough Company Secretary

28 May 2024

Review of Performance

For the six months ending 31 March 2024, the MaltaPost Group registered an improved profit before tax of €2.5 million (2023: €0.7 million).

• · Total revenue reached €20.9 million (2023: €20.4 million) following an increase in international cross-border business that falls outside the scope of the Universal Service Obligation.
• · Total expenditure was contained at €18.8 million (2023: €19.6 million) partly attributable to the efficiency measures implemented.
• · Cost-to-Income ratio stood at 90.0% (2023: 96.1%) following lower losses incurred in delivering the Universal Postal Service Obligation.

Group revenues performed well in a challenging macroeconomic environment and despite increasing inflationary pressures. We remain focused on furthering our total last-mile parcel volumes deliveries as we continue to experience significant Letter Mail declines year-on-year. This decline is being partly mitigated by occasional and select tariff revisions, even though the cost of delivering the Universal Service Obligation continues to rise as a result of inflationary pressures.

Outlook

Following the improvement in financial performance in the first six months of this financial year, MaltaPost remains on track to meet its full-year financial targets.

The postal service is classified by the EU as being one of General Economic Interest and therefore the introduction of a fair and reasonable tariff adjustment mechanism to service the highly regulated Universal Postal Service Obligation remains key. Until this is introduced, MaltaPost continues to be made to subsidise select postal services within the Universal Service Obligation.

The Company's determination to implementing the next phase of its 'One Delivery Strategy' across Malta and Gozo continues. Also, the drive to bring to successful fruition its longer-term investments in Life and General Insurance will continue, together with efforts to grow its Document Management Services.

As the national postal operator, employing close to 800 staff members MaltaPost remains determined to deliver to its circa 1900 shareholders a fair return on their investment.

Basis of preparation

This half-yearly report is being published in terms of Chapter 5 of the Capital Markets Rules of the Malta The half-yearly ropert to bell and the Prevention of Financial Markets Abuse Act, 2005. The half-yearly report comprises the reviewed (not audited) condensed consolidated interim financial statements for the six months ended 31 March 2024 prepared in accordance with International Financial Reporting Standards adopted for use in the EU for interim financial statements (International Accounting Standard 34, "Interim Financial Reporting"). The condensed consolidated interim financial statements have been reviewed in accordance with the requirements of ISRE 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". The comparative statement of financial position has been extracted from the audited financial statements for the year ended 30 September 2023.

Accounting policies

The condensed consolidated interim financial statements as at and for the six-month period ended 31 March 2024 has been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the EU applicable to interim financial reporting (International Accounting Standard 34, "Interim Financial Reporting"). The condensed consolidated interim financial statements information should be read in conjunction with the annual financial statements for the year ended 30 September 2023, which have been prepared in accordance with IFRSs as adopted by the EU.

New and amended standards adopted by the Group

The Group has applied the following amendments for the for its annual reporting period commencing on 1 October 2023:

• · Definition of Accounting Estimates amendments to IAS 8
• · Deferred Tax relating to Assets and Liabilities arising from a Single Transaction amendments to IAS 12
• · Disclosure of Accounting Policies amendments to IAS 1 and IFRS Practice Statement 2.

There is no impact on the adoption of these revisions on the Group's accounting policies and on the Group's financial results.

IFRS 17 replaced IFRS 4 "Insurance Contracts" and is effective for annual periods beginning on or after 1 January 2023, with early adoption permitted. This standard brought changes to the accounting for insurance contracts, investment contracts with discretionary participation features ("DPF") and reinsurance contracts. The associate company of the Group applied IFRS 17 for the first time on 1 January 2023. The adoption of this new standard had no material impact on the Group's financial results.

Impact of standards issued but not yet applied by the Group

Certain new standards, amendments and interpretations to existing standards have been published by the date of authorisation for issue of these financial statements but are mandatory for the Group's accounting periods beginning after 1 October 2023. The Group has not early adopted these revisions to the requirements of IFRSs as adopted by the EU, and the Directors are of the opinion that there are no requirements that will have a possible significant impact on the Group's financial statements in the period of initial application.

Fair values of financial assets and liabilities

The Group's financial instruments which are measured at fair value comprise the Group's financial assets. The Group is required to disclose fair value measurements by level of the following fair value measurement hierachy 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 2024 and 30 September 2023, financial assets were valued using Level 1 inputs in view of the listing status of the assets. 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.

The Annual General Meeting (AGM) of the 9 February 2024 approved a final ordinary gross dividend of €0.02587 (Net €0.02) per nominal €0.125 share, either in cash or by the issue of new shares at the option of each individual shareholder. On 8 March 2024 2,828,376 ordinary shares of €0.125 each at a premium of €0.315 each were allotted to shareholders as a scrip issue in lieu of dividends thereby increasing the issued and fully paid up share capital to 80,340,396 shares of €0.125 each, resulting in a paid up share capital of €10,042,550. The effect on the share premium account is presented in the statement of changes in equity.

Segment information

Operating segments

The Group primarily operates in one segment that comprises the provision of postal and related retail services to customers, which activities are substantially subject to the same risks and returns. Accordingly, the presentation of segment information as required by IFRS 8, Operating segments, within these financial statements is not deemed applicable.

Information about geographical segments

The Group's revenues are derived from operations carried out in Malta and its non-current assets are predominantly located in Malta.

Information about major customers

The Group does not have any particular major customer, as it largely derives revenue from a significant number of customers availing of its services. Accordingly, the Group does not deem necessary any relevant disclosures in respect of reliance on major customers.

Condensed Consolidated Interim Statement of Financial Position

	Group
		31 March 30 September
	2024	2023
	€000	€000
	Unaudited	Audited
ASSETS
Non-current assets
Property, plant and equipment	22,475	22,822
Right-of-use assets	1,651	1,661
Intangible assets	1.349	1,319
Investment in associate	1,802	1,716
Financial assets at fair value through other comprehensive income	2,323	2,265
Deferred tax asset	397	313
Total non-current assets	29,997	30,096
Current assets
Inventories	888	752
Trade and other receivables	10,876	8.685
Current tax asset		643
Deposits with financial institutions	1,900	2,500
Cash and cash equivalents	6,565	4.368
Business of insurance accounts	390	347
Total current assets	20,619	17,295
Total assets	50,616	47,391

Condensed Consolidated Interim Statement of Financial Position (continued)

	Group
	31 March	30 September
	2024 €000 Unaudited	2023 €000 Audited
EQUITY AND LIABILITIES Capital and reserves
Share capital	10,043	9,689
Share premium	9,182	8,292
Other reserves Retained earnings	3,718 6,823	3,699 6,794
Total equity attributable to equity holders of the Company	29,766	28,474
Non-controlling interest	513	445
Total equity	30,279	28,919
Non-current liabilities
Deferred tax liability	1,299	1,299
Lease liabilities Provision for liabilities and charges	1,398 988	1.429 908
Total non-current liabilities	3,685	3.636
Current liabilities Lease liabilities	310	301
Provision for liabilities and charges	133	126
Trade and other payables	15,528	14.409
Current tax liability	681
Total current liabilities	16,652	14,836
Total liabilities	20,337	18,472
Total equity and liabilities	50,616	47.391

The condensed consolidated interim financial statements were approved by the Board of Directors on 28
May 2024 and were signed by:

Joseph Said M Chairman

Aurelio Theuma Director

Condensed Consolidated Interim Income Statement

		Group
		1 October to 31 March
	2024 €000 Unaudited	2023 €000 Unaudited
Revenue Employee benefits expense Depreciation and amortisation expense Other expenses Other income	20,926 (8,559) (1,009) (9,182) 176	20,375 (7,869) (960) (10,736) 54
Operating profit Share of results of associate Finance costs Finance income	2,352 86 (27) 75	864 (187) (29) 54
Profit before tax Tax expense	2,486 (839)	702 (295)
Profit for the period	1,647	407
Attributable to: Owners of the Company Non-controlling interest	1,579 68	383 24
Profit for the period	1,647	407
Earnings per share	€0.020	€0.005

Condensed Consolidated Interim Statement of Comprehensive Income

	Group 1 October to 31 March
	2024 €000 Unaudited	2023 €000 Unaudited
Comprehensive income Profit for the period	1,647	407
Other comprehensive income Items that may be subsequently reclassified to profit or loss Losses from changes in fair value: Financial assets at fair value through other comprehensive income	ਦੇਰੇ	(83)
Items that will not be reclassified to profit or loss Re-measurements of defined benefit obligations	(62)	(9)
Income tax relating to components of other comprehensive income: Re-measurements of defined benefit obligations	22	3
Total other comprehensive income for the period	19	(89)
Total comprehensive income for the period	1,666	318
Attributable to:
Owners of the Company	1,598	294
Non-controlling interest	68	24
Total comprehensive income for the period	1,666	318

Condensed Consolidated Interim Statement of Changes in Equity

Attributable to owners of the Company

Group Unaudited	Share capital €0000	Share premium €0000	Other reserves €000	Retained earnings €000	Total E000	Non-controlling interest €000	Total equity €000
Balance at 1 October 2022	9.414	7.367	3,731	6.454	26,966	408	27,374
Comprehensive income
Profit for the financial period				383	383	24	407
Other comprehensive income
Financial assets at fair value through other comprehensive income
Losses from changes in fair value			(83)		(83)		(83)
Re-measurements of defined benefit obligations, net of deferred tax			(୧)		(6)		(6)
Total other comprehensive income			(89)		(89)		(88)
Total comprehensive income			(88)	383	294	24	318
Transactions with owners
Distributions: Dividends				(1,506)	(1,506)		(1,506)
Changes in ownership interest that do not result in loss of control Increase in share capital	275	925			1,200		1,200
Total transactions with owners	275	વેટ્ટ		(1,506)	(306)		(306)
Balance at 31 March 2023	9,689	8,292	3,642	5,331	26,954	432	27,386

Condensed Consolidated Interim Statement of Changes in Equity (continued)

Attributable to owners of the Company

Group Unaudited	Share capital €000	Share premium €000	Other reserves €000	Retained earnings E000	Total €000	Non-controlling interest €000	Total equity €000
Balance at 1 October 2023	9.689	8.292	3.698	6.794	28,474	445	28,919
Comprehensive income
Profit for the financial period				1,579	1.579	ല്ലെ	1,647
Other comprehensive income
Financial assets at fair value through other comprehensive income
Losses from changes in fair value			59		રેન્કે		રેકે
Re-measurements of defined benefit obligations, net of deferred 19x			(40)		(40)		(40)
Total other comprehensive income			19		19		19
Total comprehensive income			19	1.579	1,598	୧୫	1,666
Transactions with owners
Distribution:
Dividends				(1,550)	(1,550)		(1,550)
Changes in ownership interest that do not result in loss of control
Increase in share capital	354	890			1,244		1,244
Total transactions with owners	354	890		(1,550)	(306)		(306)
Balance at 31 March 2024	10,043	9,182	3,718	6,823	29,766	513	30,279

Condensed Consolidated Interim Statement of Cash Flows

	Group
	1 October to 31 March
	2024 €000 Unaudited	2023 €0000 Unaudited
Cash flows from operating activities
Cash from customers	18,909	19,845
Cash paid to suppliers and employees	(17,476)	(20,484)
Cash flows attributable to funds collected on behalf of third parties	730	529
Cash generated from operating activities	2,163	(110)
Income tax refund / (paid)	430	(193)
Net cash generated from/ (used in) operating activities	2,593	(303)
Cash flows from investing activities
Interest charged on lease liabilities	(24)	(28)
Interest received	73	50
Purchase of property, plant and equipment	(237)	(625)
Purchase of intangible assets	(310)	(410)
Purchase of investment in associate		(500)
Maturity of deposits with financial institutions	1.100	2,500
Placement of deposits with financial institutions	(500)
Net cash generated from investing activities	102	987
Cash flows from financing activities
Principal element of lease payments	(149)	(140)
Dividends paid	(306)	(299)
Net cash used in financing activities	(455)	(439)
Net movement in cash and cash equivalents	2,240	245
Cash and cash equivalents at beginning of period	4,715	5.864
Cash and cash equivalents at end of period	6,955	6.109

Statement pursuant to Capital Market Rules issued by the Malta Financial Services 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 2024, 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 Capital Market Rules.

Joseph Gafa Chief Executive Officer

Independent auditor's report

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

Report on review of condensed consolidated interim financial information

Introduction

We have reviewed the accompanying condensed consolidated interim statement of financial position of MaltaPost p.l.c. and its subsidiaries (the 'Group') as at 31 March 2024 and the related condensed consolidated interim statement of comprehensive income, changes in equity and cash flows for the six-month period then ended and explanatory notes. Management is responsible for the preparation of this condensed consolidated interim financial information in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU applicable to interim financial reporting (International Accounting Standard 34 "Interim Financial Reporting"). Our responsibility is to express a conclusion on this condensed consolidated 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 independent auditor of the entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we 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 consolidated interim financial information is not prepared, in accordance with International Accounting Standard 34 "Interim Financial Reporting".

Other matters

This report, including the conclusion, has been prepared for and only for the Group and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Simon Flynn Principal

For and on behalf of PricewaterhouseCoopers 78, Mill Street, Zone 5, Central Business District, Mriehel, CBD 5090, Malta

28 May 2024

The maintenance and integrity of the MattaPost p.l.c. website is the responsibility of the Directors of the work carried a) out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the condensed consolidated information since this was initially presented on the website that may have boom of the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.