Maltapost reports downward trend in profits

"Changes in tariffs on cross-border mail imposed by the Universal Postal Union (UPU) with effect from 1 January 2012 continues to have an adverse impact on MaltaPost's financials," according to the Maltapost's interim directors' statement.

The company published its statement covering the period from the start of the second half of their financial year on 1 April to the date of this announcement.

The Directors explained that "in this respect, MaltaPost continued to work closely with the Malta Communications Authority (MCA) to ensure the adoption of a fair and regulatory approach to its public tariffs", adding that "the increases in costs from the change in tariffs on cross-border mail must necessarily be balanced by realistic tariffs".

According to the statement, "turnover figures for the period under review are marginally lower than those for the same period last year whilst operating costs have increased considerably. As a result, MaltaPost warned that profitability on normal trading activity is lower than that registered in the same period last year.

"During the first half of their financial year from 1 October 2011 to 31 March 2012, MaltaPost suffered a 53% decline in pre-tax profits to €796,000."

"Despite the negative impact from the changes in the UPU tariffs, international traffic registered an increase in revenue reflecting the volume growth registered in international mail particularly in the parcels and packets sector.

"On the other hand, the local letter service remains a loss-making activity as the rates charged render the service commercially unviable coupled with a continued decline in traditional mail volumes."

During the period under review, MaltaPost continued to invest and enhance the range of ancillary services, expanded its non-core activities in order to further diversify its revenue streams and continued with its branch upgrading programme.

The company's directors also noted that the downward trend in profitability reported for the six months ended 31 March 2012 will also be reflected in the second six months of the Company's financial year ending 30 September 2012.

Furthermore, the Board of Directors believes that this trend will continue and even accelerate in future financial periods and until such time as the regulatory framework within which the Company operates is definitely and adequately revised. MaltaPost stated that only this will ensure the economic viability of offering a Universal Postal Service.