The challenges brought about by industry-specific conditions have impacted on the general operating environment of MaltaPost, the postal carrier said this week in announcing its interim financial results.
MaltaPost said that during the first half of its financial year it had been faced with “a considerable increase in direct mail costs due to changes in tariffs regulated by the Universal Postal Union (UPO)”, which also adversely impacted on the company’s revenue streams.
MaltaPost, as the national regulated postal operator, said in a statement that it is “mindful of its obligations to provide an affordable universal service, albeit extending some of its core services at a loss in the short term as local letter prices continue to be the lowest in the EU”.
The company said it is working closely with its regulator, the Malta Communications Authority, to ensure a fair regulatory approach that is appropriate and relevant to the challenging and dynamic competitive market in which it operates.
As already announced, the company has concluded the acquisition of key properties, including its head office in Marsa and other strategically located properties. These were financed by a blend of own funds and bank borrowing which, understandably, had an effect on the interim results through a decrease in net finance income and an increase in depreciation and amortisation charges.
As a result of the above, MaltaPost reported a profit before tax for the six months ended 31 March 2012 of €796,000 compared to the €1.69 million registered in the corresponding period last year.
Other contributing factors and key indicators underlying these interim financial statements were:
Turnover increased by 3.1 per cent to €11.0 million (2011: €10.7 million). Traditional mail volumes are still on the decline, in line with the worldwide trend. However, this was offset by an increase in weight of cross-border traffic, which registered an increase in revenue despite being negatively affected by the change in tariff structure as determined by the UPU. Other non-postal revenue also contributed positively to the increase in turnover;
Other expenses increased by 22.6 per cent, principally as a result of the increased mail costs explained above and labour costs;
Total assets increased by 7.9 per cent to €29.6 million;
Shareholders’ funds increased by 1.4 per cent to €14.7 million.
Despite the challenges facing the postal market, the Board of Directors said it is confident that the company has the necessary human, technical and financial resources to provide the best possible range of services to the community while continuing to deliver a fair return to its shareholders.