On 18 May 2022, MaltaPost plc published its half yearly results for the six-month period ended 31 March 2022.
Revenues contracted by 23.2% to €15.7 million (H1 2020/21: €20.4 million) reflecting lower amounts of international cross-border mail and parcel volumes, as well as a drop in local single and bulk mail volumes.
In view of the lower business, operating expenses contracted by 21.3% to just under €15 million. However, given the sharper decline in revenues than costs, operating profit dropped to €0.72 million compared to €1.42 million in the previous comparable period. Excluding depreciation charges, EBITDA contracted by 29% to €1.63 million whilst the EBITDA margin slipped to 10.4% (H1 2020/21: 11.2%).
After accounting for finance income of €0.03 million and a loss of €0.17 million pertaining to the company’s investment in IVALIFE Insurance Ltd, the postal operator reported a profit before tax of €0.59 million which is substantially lower than the €1.4 million figure reported in the first half of the 2020/21 financial year. After deducting a tax charge of €0.26 million, the net profit for the period dropped to €0.33 million (H1 2020/21: €0.88 million) which, in turn, translates into an annualised return on average equity of 2.42% (H1 2020/21: 6.66%).
The Statement of Financial Position shows that, compared to the position as at the end of September 2021, total assets increased by 0.3% to €52.3 million whilst total liabilities expanded by 5.9% to €24.8 million. Overall, net assets contracted by 4.3% to €27.5 million.
In their commentary, the Directors explained that while a number of revenue streams continue to provide fair margins, MaltaPost is being forced to carry the unfair financial burden of subsidising most services within the Universal Service Obligation such as those relating to local and outbound mail. Moreover, the pandemic has had a very negative impact on the whole supply chain. This, coupled with Brexit and the EU’s decision to withdraw VAT exemption on certain items purchased from outside the EU all contributed to significant disruption and further costs. Such developments resulted in reduced postal volumes and the associated revenue. Furthermore, MaltaPost had to absorb the cost of massive increases in airfreight rates, higher terminal dues, and to offer a service that was conditioned by limited flight connections.
Looking ahead, MaltaPost noted that the outlook for the next six months is challenging. The company continues its discussions with the Malta Communications Authority to revise the tariffs of the loss-making services. In addition, MaltaPost is also requesting the Regulator to approve a tariff revision agreement so as to allow it to plan ahead and to make the necessary capital investment to sustain the medium to long-term commercial viability of the Universal Service Obligation. In parallel, MaltaPost remains committed to continue its internal cost-reduction programme and to make further investment in technology and last-mile delivery tools.