MaltaPost p l c : Preliminary Statement of Half Yearly Results ended 31 March 2021

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 18 May 2021, the Board approved the attached Unaudited Condensed Consolidated Interim Financial Statements for the six‐month period ended 31 March 2021.

These Unaudited Condensed Consolidated Interim Financial Statements for the period ended 31 March 2021, are available for viewing and download from the Company's website www.maltapost.com

UNQUOTE

Graham A. Fairclough

Company Secretary

18 May 2021

MaltaPost p.l.c.

Preliminary Statement of Half Yearly Results

For the six months ended 31 March 2021

The MaltaPost Group comprises MaltaPost p.l.c. (the Company), and its subsidiary companies, Tanseana Limited and PostaInsure Agency Limited, which was acquired during this period, and its associate company IVALIFE Limited.

Review of Performance

For the six months ended 31 March 2021, MaltaPost Group registered a profit before tax of €1.40million, (2020: €1.41million).

• Total revenue increased to €20.2 million (2020: €17.2 million) following an improvement in international cross-border mail and parcel volumes;
• Total expenditure rose to €19.0 million (2020: €15.9 million) as a consequence of higher cross- border conveyance costs and losses associated with certain areas of the Universal Service Obligation (USO);
• Investments increased to €1.7m (2020: €400k) following the investment in IVALIFE Limited;
• Cost to income ratio decreased to 88.7% (2020: 92.1%);
• Shareholders' funds remained stable at €26.9 million (2020: €27.2 million).

The Company continues to weather the pandemic by maximising all revenue potential through changes in its business mix and by implementing a strict cost-containment strategy. The impact of COVID-19 pandemic has dampened economic activity also leading to an accelerated reduction in traditional postal volumes due to e-substitution. Certain services within the USO shall continue to be a financial burden until such time that the Malta Communications Authority (MCA) agrees to our requests for fair and reasonable tariff revisions. Following Brexit, the implementation of the Trade and Cooperation Agreement between the EU and the UK brought about additional challenges to the postal sector by the introduction of mandatory customs border checks.

Outlook

The outlook for the second half of the financial year remains challenging and difficult to forecast due to the pandemic-related uncertainties. As from 1 July 2021, VAT exemption will be removed also on goods from outside the EU with a value of below €22 in value. This development is expected to negatively impact our inbound small packet volumes. We trust that in the near future, the authorisation of tariff revisions by the MCA will allow the Company to be fairly compensated in respect of its Universal Service Obligation.

The Board of Directors thanks all staff members for their dedication and commitment as they continue to work hard during these unprecedented times. The Board remains confident that the Company shall continue to be resilient while remaining agile and alert to respond to evolving market circumstances.

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MaltaPost p.l.c.

Preliminary Statement of Half Yearly Results

For the six months ended 31 March 2021

Basis of preparation

This half-yearly report is being published in terms of Chapter 5 of the Listing Rules of the Listing Authority

• Malta Financial Services Authority 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 2021 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 2020.

Accounting policies

The condensed consolidated interim financial statements as at and for the six-month period ended 31 March 2021 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 2020, which have been prepared in accordance with IFRSs as adopted by the EU.

New and amended standards adopted by the Group

A number of amendments became applicable for the current reporting period but did not have any impact on the Group's accounting policies.

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 2020. 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 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 2021 and 30 September 2020, 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.

Acquisition of PostaInsure Agency Limited

On 5 November 2020, MaltaPost entered into a share purchase agreement with PostaInsure Agency Limited (PostaInsure), formerly Untours Insurance Agents Limited, a limited liability company registered in Malta under the Companies Act (Cap.386), with registration number C 5655 and registered office at 4, Old

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MaltaPost p.l.c.

Preliminary Statement of Half Yearly Results

For the six months ended 31 March 2021

Bakery Street, Valletta, for the purchase of 49% of the issued share capital for a consideration of €275,000. The transfer of shares was effected on 9 December 2020, at which date MaltaPost also acquired de-facto control in view of its representation on the board of directors.

Details of the purchase consideration are as follows:

€000

Fair value of 49% equity holding in PostaInsure as at acquisition date

275

Non-controlling interests have been measured at the related proportion of the net identifiable assets at acquisition.

In the six-month period to 31 March 2021, PostaInsure contributed revenue of €201,000 and profit of €24,000.

PostaInsure is principally engaged in providing general insurance services, a service offering that is ancillary to services currently provided by MaltaPost. This acquisition is expected to give rise to synergies within the Group.

Payments for acquisition of subsidiaries, net of cash acquired

The amounts presented in the statement of cash flows comprise the payments referred to above of €275,000, net of cash and cash equivalents attributable to the operations taken over at acquisition date.

Segment information

Operating segments

Following the acquisition of the subsidiary PostaInsure, the Group has two reportable segments, which are effectively the Group's distinct strategic business units and cash-generating units (CGU), as they represent the lowest level at which separately identifiable cash flows can be identified. The strategic business units are managed separately with their own separate management structure and board of directors.

The following summary describes the operations in each of the Group's reportable segments:

• Postal operations CGU comprise the Group's postal, document management, financial services and related retail services
• Insurance CGU comprise the Group's operations of PostaInsure, which provides general insurance services.

The Group's internal reporting to the Board of Directors and Senior Management is analysed according to these two segments. For each of these two strategic business units, the Board of Directors reviews internal management reports regularly. Information about the insurance CGU is not deemed material to MaltaPost as a reporting entity and the disclosure of summarised financial information by segment is accordingly not necessary.

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.

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MaltaPost p.l.c.

Preliminary Statement of Half Yearly Results

For the six months ended 31 March 2021

Condensed Consolidated Interim Statement of Financial Position

ASSETS

Non-current assets

Property, plant and equipment

Right-of-use assets

Intangible assets

Investment in associate

Financial assets:

Fair value through other comprehensive income

Deferred tax asset

Total non-current assets

Current assets

Inventories

Trade and other receivables

Current tax asset

Deposits with financial institutions

Cash and cash equivalents

Total current assets

Total assets

Group

31 March	30 September
2021	2020
€000	€000
Unaudited	Audited
18,953	18,749
1,679	1,805
1,022	948
1,667	248
3,276	3,561

610448

27,207 25,759

677	719
11,384	8,410
5	-
3,000	5,600
8,181	6,058
23,247	20,787
50,454	46,546

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