ÁRSSKÝRSLA 2019
ANNUAL REPORT
Annual report Iceland Post 2019 4
Address by the CEO: New beginning
6
Address by the chairman: At a turning point
8
Consolidated financial statements
9
Endorsement and Statement by the Board of Directors and the CEO
11
The Auditor General´s report
13
Independent auditor´s report
14
Consolidated statement of Profit and Loss for the year 2019
15
Consolidated statement of Financial Position as at 31. December 2019
16
Consolidated statement of Changes in Equity for the year 2019
17
Independent auditor´s report
18
Consolidated statement of Profit and Loss for the year 2019
19
Notes
3
Address by the CEO
New beginning The year 2019 was a period of considerable changes at Iceland Post, to say the least. The board of directors and employees have worked closely together on restructuring the company, re-evaluating the approach to our entire operation and the service we supply to our customers. It’s been a joy to see how unified this group has been in taking on this task, and it’s clear as day that there is momentous energy and ambition in all those who keep this company running. It’s a been a great privilege for me to have had the opportunity to work with this capable team in these times of drastic change. I want to thank all of the Iceland Post’s employees for wholeheartedly taking part in this tough time of transitional period, and also assure them that their contributions are the main reason that now we can see positive forecasts in the running of our company. It was evident that it was necessary to take action quick in order to manage the financial side of the business, but the company was in a difficult spot in the beginning of the year. The actions we’ve taken have yielded positive results and a strong turnaround from recent years, but plans for the year 2020 assume even better returns and a more stable operation once the reforms are fully completed. By focusing on streamlining and reforms we have managed to lower operating costs by a considerable amount. It’s satisfying to see the operating profits (EBITDA), without one time cost due to restructuring, being 6.3% of the year’s turnover, increasing from 0.7% last year while the income remains almost identical. It’s especially interesting to see the 4th quarter returns, but at the time the company’s EBITDA was at 10.2%, which is a considerable increase of the 3.4% in the same quarter last year. The proportion of wages in the same time period is a positive indication of the future, but it dropped from 69% to 62% while income remained nearly unchanged. The company reported losses of 510 M. ISK. for the year, a considerable increase from last year, when 292 M. ISK. were reported. This can largely be explained by the fact that restructuring costs were recorded within the year. Forecasts for 2020 assume that a certain balance will be reached in the operation of the company, resulting in miniscule losses, but with a reversal into profit in the year 2021, which will then increase in coming years. Iceland Post has been fairly well leveraged these last years, due to investments in infrastructure of various kinds, which certainly are useful in running the company, but it’s especially noteworthy to point out that the interest bearing debts of the company are now around 4
1.9 B. ISK, lowering from 3.4 B. ISK in the middle of the year 2019. The biggest difference was an increase in share capitalisation made during the year, but with lower operating costs it was possible to put that money entirely into lowering the company’s debts instead of using it for operating costs. A considerable change was made to the group’s structure during the year, but most of the Iceland Post’s operating subsidiaries were sold. Gagnageymslan ehf. and Frakt flutningsmiðlun ehf. were sold in the autumn months and Samskipti ehf. went in open divestment procedure, which will result the company being sold in the beginning of 2020. As such, Iceland Post will not be in direct competition with any of its subsidiaries after these changes. Furthermore, going on more of the company’s assets will be sold in order to lower the debt burden even further. Also worthy of note is that nearly all levels of the company have undergone streamlining, not only with reducing numbers of employees, it has been incredible seeing the creativity and inventiveness of our employees all around the country, working on finding new, better and less costly ways of servicing our customers. One of the biggest tasks of the year was to reduce the company’s wage costs, in sync with the changes being made in this business environment. Full-time positions were reduced by a total of 14% during the year, but by the end of 2019 there were 721 full-time positions in the company, compared to 822 the year before. Managers have been reduced by 30%, employees working general office jobs have been reduced by 27%, and IT employees have been reduced by 25%, to name a few examples. It is a vital fact that we were able to undergo this streamlining process without limiting the services to our customers in any way. The company’s headquarters were moved to a smaller and less expensive housing, where a task-oriented facility was available, and now all the working environment has a more open and improved atmosphere than before. This change has resulted in a stronger sense of team unity and better interdepartmental collaboration, as well as considerably lowering the housing expenses. Drastic changes were made on the chief executive team this last year, but a new and flatter organisation was introduced, emphasising less overhead, more direct communication channels, and quicker decision-making. New and capable managers and employees joined us on many levels of the company, which has infused the corporate culture with new life. But it’s been most giving to see our long-time employees flourish, now finding themselves in their new roles. We
now greatly emphasise establishing a strong culture of leadership in the company. All of our managers who have subordinates attend a series of leadership seminars, where they work purposefully on unifying the team and improving the working atmosphere. Iceland Post has a great wealth in its human resources, and it’s a key element of reaching success in both business and providing service. Greatly improved customer service One of the greatest current challenges for the company is to find its way forward in a changed world, where traditional letters are decreasing in number with a greater emphasis being put on parcel deliveries. Much has already been accomplished in the last few years to improve our service in these fields, but it must still be said that Iceland Post can do much better in those areas. In the year 2020 we will take great leaps in these fields and the customers of the Iceland Post will see numerous and vital innovations in the company’s services this year. It’s of great importance that the company offers digital solutions which give customers more control, allowing them to decide how they want to utilise the service; deciding where and when it suits them to get their deliveries, making it easier to send documentation in for customs clearance, and finally allow them to finalise payments. Iceland Post will introduce a new application and website this year, which will completely transform this digital service. Postboxes (“Póstbox” package service stations) will also be increased from 8 to almost 40 during the year, and they will be located all around the country. But that is only the beginning of this evolution, as it’s evident that the Postboxes will increase greatly
in the near future, as they are one of the highest-ranked services in our customer surveys. Additionally, new innovations will be introduced, such as package deliveries at the service stations of our operating partners, but by doing so the number of our service stations will be greatly increased, bringing our service to customers all around the country. Not to mention several innovations in servicing online retailers, which are being developed in conversation with those customers, also introduced this year. All of these new service solutions build upon the simple approach of listening carefully to our customers, analysing their needs and adapting the service to them. The company’s improved service is based upon solid information technology, meaning a strong emphasis will be placed on that part of the operation in the coming year. The 2019 annual financial statements of the Iceland Post show a company in the middle of a transitional period, and as such they are very acceptable. Improvements can always be made, however, but I’m convinced that all of the company’s employees will have ambition to seeing the ongoing positive developments through, making Iceland Post a stronger and better company in the coming year, for the betterment of everyone living in Iceland. Birgir Jónsson CEO of the Iceland Post 5
Address by the Chairman of the Board
At a turning point Iceland Post, as is the case with many other postal services worldwide, stands at a crossroads in a vastly changed operating environment. With the enactment of the new post legislation that came into force at the beginning of the year, a new framework has been created for postal services in Iceland. New challenges and solutions accompany changing times, as do opportunities to adapt to and keep up with new requirements as well as to maintain the services that all communities wish to enjoy. Iceland Post should be regarded as a system significant company responsible for providing important public services on a national level. The operating environment of postal services, its legal framework and rules in Iceland should be regarded in this light. Iceland Post ohf. recently celebrated its 20th anniversary although its overall history spans centuries. Iceland Post is, by many, regarded as the oldest operational company in Iceland, having a history that reaches back to the year 1776. During this period, there have been extensive social changes in Iceland, just as in neighbouring countries. Recent years have brought us, and others, revolutionary changes in communications and the way in which we conduct our business transactions, such as the growing importance of Internet retailing. At the same time, the volume of letters sent by post has dropped drastically. This is why postal companies in the western world have, one after another, needed state aid for the past 20 years in order to be able to maintain the level of service demanded of them. Iceland Post is one of the few remaining postal companies to continue operations despite this considerable reduction in letters sent by post. In order to do so, the company has streamlined its operations, changed the services it provides and adapted them to new circumstances. It has proved important for the company to utilise its distribution system for package deliveries in conjunction with letter deliveries to provide letter delivery services to areas that are no longer able to cover the cost. One of the main tasks of the Board of Directors and the management of Iceland Post has been to seek further ways of economising while maintaining, at the same time, the services that the company is responsible for providing on a national level. In addition, every effort has been made to strengthen 6
the company’s income base even further. This work is never-ending. It is important that Iceland Post, as a universal services provider, is ensured fair returns for the services that the company is duty bound to provide each time, but which does not cover costs according to market criteria. During the past year of operation, the Board and the management of Iceland Post have been preparing a number of proposals and suggestions intended to modernise the company, strengthen its position and improve its operating capabilities. Quite a few of these have already been implemented. As an example, mention may be made of the decision of the Board just over a year ago that all the subsidiaries of Iceland Post still in operation should be sold, provided that an acceptable offer was received. This move has been a success and these companies have now been sold or are undergoing sales procedures. During the last Annual General Meeting, Ingimundur Sigurpálsson announced that he would be retiring from his post and we thank him for his long and excellent work for Iceland Post. The position of CEO was thereafter advertised, and a new CEO recruited. Birgir Jónsson began as CEO on 6 June 2019 and brought with him extensive experience and a diverse range of creative solutions and innovations that accord well with the changes that the Board and management have been working on recently. With the arrival of a new CEO, a new management team was created, and the number of directors and key managers was reduced in the transformation process that began in the summer and autumn of 2019. Much in the transformation process that has occurred and for which the Board, together with the managment, has made decisions has been painful, not least the termination of employment of employees, many of whom have worked for the company for a long time. These decisions, however, along with the reduction in the company’s overhead, were necessary. We, the Members of the Board of Directors of Iceland Post, were simply tasked with the role of streamlining the operation while at the same time ensuring that such work would have as little impact as possible on the services
provided by the company to customers throughout Iceland and is work that Board members are responsible as such just as in other limited liability companies. At the same time, we had to prepare the company for the changes inherent in the new legislation on postal services and the abolishment of exclusive rights. This has certainly been a difficult task, but the Board, consisting of a strong team of people with diverse experience and know-how, has marched in step in this work and collaborated closely. We have created an excellent team with a new CEO. Our role is to make Iceland Post a valuable company that provides its customers with exemplary services. The role of the authorities, however, is to define the company’s role and to make decisions about its future. We have recently seen a considerable turn for the better in the operation of Iceland Post and hope that its results will be positive this year and that the position of the company will continue to strengthen. The extensive streamlining actions taken in recent months have made all the difference as has the successful transformation process that has been implemented in Iceland Post. The main focus is on the core operations of the company and embarking on a number of service innovations, such as post boxes and more extensive digital services. We will continue to improve and modernise the service and there are
a number of projects being prepared that will without a doubt meet the approval of our customers throughout Iceland. In addition, there are numerous opportunities to work with companies and customers outside the greater ReykjavĂk area, those who rely the most on the services provided by Iceland Post, in the development of new communications solutions and deliveries that will strengthen rural development in Iceland. In closing, I would like to thank our employees, managers and the Board of Iceland Post for their co-operation during the year. I would furthermore, like to thank for the excellent collaboration with government ministries, the Icelandic National Audit Office and parliamentary committees that have joined us this past year in strengthening the position of Iceland Post and finding ways to beneficially address the challenges that face us and to provide all Icelanders with good services. We advance into a new year that will be demanding but will also hold opportunities to create a bright future for Iceland Post. Bjarni JĂłnsson Chairman of the Board of Iceland Post
7
CONSOLIDATED
FINANCIAL STATEMENTS* *These consolidated financial statements are translated from the original which is in Icelandic. Should there be discrepancies between the two versions, the Icelandic version will take priority over the translated version.
8
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Endorsement and Statement by the Board Directors Endorsement and Statement byofthe Board of Directors and the and the CEO CEO The Consolidated Financial Statements for Íslandspóstur ohf. are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The purpose of the Company is to provide all types of postal services based on applicable laws and regulations. Íslandspóstur ohf. plays a vital role in connecting people, businesses and communities by disseminating important information, data and products to the Icelandic people and their customers wherever they are in the country. Operations in 2019: The Group’s loss for the year, according to the Income Statement, amounted to.............................................................. The Group’s assets at year-end, according to the Balance Sheet, amounted to.................................................................. Booked equity at year-end, according to the Balance Sheet, amounted to......................................................................... The Group’s equity ratio at year-end, according to the Balance Sheet, amounted to......................................................... The average number of full-time positions during the year was ..........................................................................................
(510.822) 7.082.237 3.202.733 45,2% 721
The Group’s loss is partly attributable by ISK 225 one-off costs due to the Company’s restructuring. When restructuring costs are deducted, EBITDA amounts to ISK 491 million, or 6,3% for the year 2019. Íslandspóstur ohf. Had one shareholder at year-end and its share capital was increased by ISK 1,500 million in 2019, which was largely used to reduce the Group’s interest-bearing debt. The year 2019 was eventful for the Company, a new CEO took office around mid-year and the Company has undergone major changes during his time in office. Major restructuring has taken place and reducing the Group’s overhead cost has been a focus point. These actions have been successful and the Group is now better equipped to handle the upcoming projects following their significant operational improvements in the second half of 2019. However, it should be kept in mind that the benefits of the restructuring will be fully reflected in the 2020 operating year. New postal laws were passed during the year, which will transform the operating environment of Íslandspóstur ohf. For example, the new laws will abolish the exclusive rights of letters, which the Board of Directors welcome with open arms and is totally in line with their stance on the matter. Their long-term stance has been that the exclusive rights do not serve the best interest of the Company.
The operation of Íslandspóstur has been extremely difficult in recent years, as the public places heavy demands on the Company in terms of service levels and the role of providing comparable services throughout the country. Iceland is one of the most sparsely populated countries in the world, so it is clear that in some areas there are no market operating conditions. A collapse in the amount of sent letters has had a significant impact on the Company’s revenue streams and at the same time revenue streams from overseas shipments have flourished, but the cost of earning them has been higher than the return. This interplay has therefore led to significant losses in recent years. In 2019, an additional fee was imposed on all shipments coming from abroad as authorized by Alþingi, also a new postal law assumes that the universal service provider is paid for services in unprofitable areas. This fact, together with the restructuring of the Company, make it possible to look forward to a brighter future for the Company. On the other hand, it is important that the Company shows great restraint in operations and continues to use all the opportunities to reduce costs as much as possible and increase revenues, while also providing good service. The opportunities lie in more efficient handling of shipments with wore effective information processing and increased automation in processing and delivery of shipments. By combining all distribution centers under one roof at the Póstmiðstöð, many opportunities for more efficient classification and distribution operations will open up in the years to come.
Ársreikningur Íslandspósts ohf.
2
Fjárhæðir eru í þúsundum króna
9
Endorsement and Statement by the Board of Directors and the CEO
Endorsement and Statement by the Board of Directors and the CEO
The Board of Directors proposes that the loss for the year will be carried forward to next year, but otherwise refers to the Consolidated Statement of Changes in Equity. In the opinion of the Board of Directors and the CEO of Íslandspóstur ohf. these Consolidated Financial Statements include a fair overview of the Company’s position at year-end, the year’s operating results and financial development for the year.
The Board of Directors and CEO of Íslandspóstur ohf. hereby confirm the Company’s Consolidated Financial Statements with their Reykjavík, February 17, 2020
Board of Directors
Bjarni Jónsson
Auður Björk Guðmundsdóttir
Thomas Möller
Jónína Björk Óskarsdóttir
Eiríkur Hauksson
C EO
Birgir Jónsson
10
Ársreikningur Íslandspósts ohf.
3
Fjárhæðir eru í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
The Auditor General’s Report
The Auditor General's Report
To the Board of Directors and Shareholders of Íslandspóstur ohf.
Expectations, role and responsibilities of the Auditor General The Auditor General operates based on Act no. 46/2016, on the Auditor General and the auditing of government accounts and the Code of Ethics set by the International Organization for Supreme Audit. The role of the Auditor General is to ensure that audits and controls are in accordance with Article 4 of the Act.
The Auditor General is responsible for the work of the Auditors, who work with the Icelandic National Audit Office and perform an audit based on the Act on Auditors and audit, Act on Financial statements and other general rules that they comply with according to International Standards on Auditing.
It was examined whether the Company’s operations were in accordance with the laws that apply to the Company and, where applicable, the State Budget and supplementary budget cf. the principles of Act no. 46/2016 and the Public Finance Act no. 123/2015.
The Audit was conducted in accordance with Act no. 46/2016 on the Auditor General and audit of state accounts and Act no. 94/2019 on Auditors and auditing. The Icelandic National Audit Office, February 17, 2020.
Skúli Eggert Þórðarson, The Auditor General
Ársreikningur Íslandspósts ohf
4
11
Independent Auditor’s Report
Independent Auditor's Report
To the Board of Directors and Shareholders of Íslandspóstur ohf. Opinion We have audited the consolidated financial statements of Íslandspóstur ohf. for the year ended December 31, 2019. The consolidated financial statements comprise the income statement, the balance sheet, the statement of changes in equity, statement of cash flows, notes to the financial statements including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements give a true and fair view of the financial position of Íslandspóstur ohf. as at December 31, 2018, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and additional requirements in the Icelandic Financial Statement Act.
Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements section of our report. We are independent of Íslandspóstur ohf. and have conducted our work in accordance with Act no. 94/2019 on Auditors and auditing and Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the consolidated financial statement.
Other information In accordance with Paragraph 2 article 104 of the Icelandic Financial Statement Act no. 3/2006, we confirm to the best of our knowledge that the accompanying report of the board of directors includes all information required by the Icelandic Financial Statement Act that is not disclosed elsewhere in the financial statements.
Responsibilities of the Board of Directors and the CEO for the Consolidated Financial Statements The Board of Directors and the CEO are responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and additional requirements in the Icelandic Financial Statement Act, and for such internal control as the Board of Directors and the CEO determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the Board of Directors and the CEO are responsible for assessing Íslandspóstur ohf. ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors and the CEO either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so The Board of Directors are responsible for monitoring the preparation and presentation of the consolidated financial statements. Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
Ársreikningur Íslandspósts ohf
12
5
12
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Independent Auditor’s Report
Independent Auditor's Report As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: ˃ Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ˃ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. ˃ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. ˃ Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. ˃ Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. ˃ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated and separate financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors and the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
The Icelandic National Audit Office, February 17, 2020.
Hinrik Þór Harðarson State Authorized Public Accountant
Ársreikningur Íslandspósts ohf
6
13
Consolidated Statement of Profit and Loss and Other ConsolidatedIncome Statement Profit Comprehensive for theof year 2019 and Loss and Other Comprehensive Income for the year 2019 Notes
Operating revenue .................................................................
5
Other revenue ......................................................................
Salaries and related expenses .................................................
2019
2018
6.351.205
6.711.999
1.393.885
1.043.998
7.745.090
7.755.997
(5.145.400)
(5.440.112)
Direct cost of postal distribution ..............................................
(1.361.103)
(1.317.409)
Other operating expenses .......................................................
(747.778)
(948.030)
Restructuring expenses ..........................................................
6
6
(225.135) (7.479.416)
EBITDA
265.674
Depreciation .........................................................................
8
EBIT
(400.786)
(380.579)
(350.340)
33.834
Finance expenses ..................................................................
(301.556)
Exchange rate difference ........................................................
7.290
(Loss) before income tax Income tax ...........................................................................
10
(Loss) of continuing operations
50.446
(646.253)
Finance income .....................................................................
9
0 (7.705.551)
73.366 (187.883) 101.859
(260.432)
(12.658)
(641.011)
(362.998)
116.808
72.312
(524.203)
(290.686)
13.381
(1.969)
(510.822)
(292.655)
Owners of the Company .........................................................
(510.822)
(287.485)
Non-controlling interests ........................................................
0
(5.170)
(510.822)
(292.655)
Discountinued operations ....................................................... Comprehensive (loss) for the year
16
Total comprehensive (loss) attributable to:
Total comprehensive (loss) for the year
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
14
7
Fjárhæðir eru í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Consolidated Statement of Financial Position as at 31 Consolidated Statement of Financial Position as at December 2019 31. December 2019 Assets
Notes
31.12.2019
31.12.2018
Non-Current Assets Property, plant and equipment ................................................
11
3.431.707
3.996.312
Intangible Assets ...................................................................
12
107.675
134.227
Right-of-use asset .................................................................
17
638.806
0
Long-term receivables ............................................................
13
569.997
715.786
52.383
79.883
20
188.875
70.340
4.989.443
4.996.548
Investment in other companies ............................................... Deferred tax asset .................................................................
Current Assets Inventories ...........................................................................
15
139.311
177.842
Accounts receivable ...............................................................
14
769.626
898.682
Other receivables ..................................................................
120.877
78.519
Cash and cash equivalents ......................................................
562.204
198.478
1.592.018
1.353.521
Current assets in continuing operations Assets held for sale ...............................................................
500.776
0
Total current assets
2.092.794
1.353.521
Assets
7.082.237
6.350.069
Share capital ........................................................................
2.947.500
1.447.500
Statutory reserve ..................................................................
367.927
367.927
Restricted equity ...................................................................
30.011
21.681
(Accumulated deficit) / Retained earnings .................................
(142.705)
391.172
Equity attributable to owners of the Company ...........................
3.202.733
2.228.280
Non-controlling interests ........................................................
0
9.060
3.202.733
2.237.340
16
Equity and liabilities Equity
18
Equity Non-Current Liabilities Interest-bearing liabilities .......................................................
19
1.650.922
2.026.720
Lease liability ........................................................................
17
552.338
0
2.203.260
2.026.720
485.788
657.089
302.063
799.331
Current Liabilities Accounts payable .................................................................. Interest-bearing liabilities .......................................................
19
Current maturities of lease liability ..........................................
17
99.397
0
Other current liabilities ...........................................................
21
763.061
629.589
1.650.309
2.086.009
Current Liabilities in continuing operations
25.935
0
Total current ciabilities
1.676.244
2.086.009
Liabilities
3.879.504
4.112.729
Equity and liabilities
7.082.237
6.350.069
Liabilities held for sale ............................................................
Samstæðuársreikningur Íslandspósts ohf. 2019
8
16
Fjárhæðir eru í þúsundum króna
Amount are in ISK thousand
15
Consolidated Statement Statement of ofChanges Changes Consolidated in Equity for the year 2019 Equity for the year 2019
2018 January 1, 2018 Restricted share in earnings ........ (Loss) for the year ...................... December 31, 2018 2019 January 1, 2019 Share capital increase ................. Impact of subsidiary sale ............. Effect of IFRS 16 ........................ Restricted share in earnings ........ (Loss) for the year ...................... December 31, 2019
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
16
in
Statutory
Restricted
Retained earnings /
Non-controll-
Total
Share capital
reserves
equity
(Accumulated deficit)
Total
ing interest
Equity
1.447.500
367.927
32.335 (10.654)
367.927
21.681
2.515.765 0 (287.485) 2.228.280
14.230
1.447.500
668.003 10.654 (287.485) 391.172
(5.170) 9.060
2.529.995 0 (292.655) 2.237.340
1.447.500
367.927
21.681
391.172
2.228.280
9.060
(14.725) (8.330) (510.822) (142.705)
1.500.000 0 (14.725) 0 (510.822) 3.202.733
1.500.000
8.330 2.947.500
367.927
30.011
9
(9.060)
0
2.237.340 1.500.000 (9.060) (14.725) 0 (510.822) 3.202.733
Fjárhæðir eru í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Independent Auditor’s Report
Consolidated Statement of Cash Flows for the year 2019
Notes
2019
2018
Cash flows from operating activities (Loss) for the year ....................................................
(510.822)
(292.655)
Operating items not affecting cash flow: 666.487
414.541
(Profit) loss on sale of assets ......................................
Depreciation ............................................................
(63.886)
5.347
Share capital gains ...................................................
(16.268)
0
Net financial expenses ..............................................
263.952
21.217
Income tax ..............................................................
8
10
(Decrease) in provisions ............................................ Working capital from operating activities
(116.808)
(72.122)
(521)
0
222.133
76.328
Inventories, decrease ...............................................
28.432
2.007
Other operating assets, decrease ................................
121.237
328.233
Operating liabilities, increase, (decrease) .....................
46.575
Cash generated from operating activities
418.376
(202.145) 204.423
Interest received ......................................................
34.240
Interest paid ...........................................................
(145.074)
Exchange rate difference paid ....................................
7.290
101.859
314.833
134.793
Net cash from operating activities
64.073 (235.562)
Cash flows from investing activities Purchase of intangible assets .....................................
12
(38.671)
(45.607)
Real estate and land .................................................
11
(359.490)
(812.479)
Machinery, equipment and vehicles .............................
(85.994)
(381.086)
Proceeds from sales of fixed assets .............................
124.331
88.454
Other changes .........................................................
0
17.838
Net cash flow due to sale of subsidiaries ......................
2.609
0
(357.215)
(1.132.880)
(1.014.924)
(199.135)
Cash flows from financing activities Repayment on long-term loans ................................... Repayment on lease liability .......................................
17
(122.811)
0
Payment of interest on lease liability ...........................
17
(17.434)
0
Share capital paid .....................................................
18
970.619
0
0
500.000
New long-term debt ..................................................
603.400
680.624
(Decrease) of short-term debt to credit institutions .......
(12.581)
0
406.269
981.489
Increase / (decrease) in cash and cash equivalents .......
363.887
(16.598)
Cash and cash equivalents at year beginning ................
198.477
215.076
(160)
0
562.204
198.478
Loan from the Central Bank of Iceland .........................
Cash and cash equivalents classified for sale ................
16
Cash and cash equivalents at year-end ........................ Non cash transactions Interest bearing loan converted to share capital
18
Sales of subsidiary in bond trading
529.381 6.500
Refinanced long-term debt
1.169.204
Refinanced long-term debt
(1.169.204)
Samstæðuársreikningur Íslandspósts ohf. 2019
10
Fjárhæðir eru í þúsundum króna
Amount are in ISK thousand
17
Consolidated Statement of Profit and Loss and Other Comprehensive Income for the year 2019
Notes to the Consolidated Financial Statments 1.
General information Íslandspóstur ohf. is a public limited company and operates based on Act no. 2/1995 on Public Limitied Companies. Íslandspóstur ohf. is domiciled in Iceland is the legal residence of the Company at Höfðabakki 9D, 110 Reykjavík. These Consolidated Financial Statements include the financial statements of Íslandspóstur ohf. and its subsidiaries, collectively referred to as "the Group". At year-end 2019, the Group’s subsidiaries are two, Samskipti ehf. and Trönur ehf. but at year-end 2018 they were four. Gagnageymslan ehf. and Frakt flutningsmiðlun were sold in 2019, also Samskipti ehf. and Trönur ehf. are presented as assets classified for sale. See further information in note 16 about assets classified for sale and discontinued operations. The Company’s Board of Directors and CEO confirmed the Consolidated Financial Statements with their signatures at February 17, 2020
2.
Basis of preparation The Consolidated Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRSs) as approved by EU and additional requirements in the Icelandic Financial Statement Act. The Consolidated Financial Statements have been prepared on the historical cost basis, except in the following cases: - Equity method used for shares in associates. - Assets classified for sale are recognized the lower or carrying amount or fair value less costs to sell. The Consolidated Financial Statements are prepared using the same accounting policies as the previous year. These Consolidated Financial Statements are presented in Icelandic kronas, which is the Company’s functional currency. All financial information presented in Icelandic kronas has been rounded to the nearest thousand if not otherwise noted.
3.
Adoption of new and audited International Financial Reporting Standards (IFRSs) The Group has adopted all new applicable International Financial Reporting Standard (IFRSs), amendments thereto and interpretations to the accounting periods that came into effect on January 1, 2019, as approved by the EU. IFRS 16 Leases came into effect January 1, 2019. Please see the description and effect of the implementation below. The Group has not adopted any standards, amendments to standards or interpretations of them that are effective for subsequent reporting periods, but may be adopted sooner. The effect of other standards, amendments and interpretations that have not been adopted is, in the opinion of management, none or insignificant to the Consolidated Financial Statements. IFRS 16 Leases In the current year, the Group, for the first time, has applied IFRS 16 Leases. IFRS 16 introduces new or amended requirements with respect to lease accounting. It introduces significant changes to the lessee accounting by removing the distinction between operating and finance lease requires and requiring the recognition of a right-of-use asset and a lease liability at commencement for all leases, except for short-term leases and leases of low value assets. In contrast to lessee accounting, the requirements for lessor accounting have remained largely unchanged. Details of these new requirements are described in note 26. The impact of the adoption of IFRS 16 on the Group's Consolidated Financial Statements is described below. The Group has applied IFRS 16 using the modified retrospective approach, with no restatement of comparative information. The Group has elected to apply the practical expedient to grandfather the definition of a lease on transition, and thereby applying IFRS 16 to all contracts entered into before 1 January 2019 and identified as leases in accordance with IAS 17 and IFRIC 4. With the application of IFRS 16, the nature of expenses related to operating leases will now change because the Group will recognize a depreciation charge for right-of-use assets and interest expense on lease liabilities. Previously, the Group recognized operating lease expense on a straight-line basis over the term of the lease. As a result, the application of IFRS 16 led to an increase in profit of the year 2019 by ISK 5,8 million. The effects on P/L line items are as follows: Increase in depreciation and amortisation expense by ISK 117 million, increase in finance cost by ISK 17,4 million and decrease in operating expenses by ISK 140,2 million.
At initial application on 1 January 2019 the Group recognized additional lease liabilities of ISK 292,6 million and a right-of-use asset ISK 274,2 million. Under IAS 17, all lease payments on operating leases were presented as part of cash flows from operating activities. Consequently, the net cash generated by operating activities in the year 2019 has increased by ISK 140,2 million and net cash used in financing activities increased by the same amount.
Samstæðuársreikningur Íslandspósts ohf. 2019 Amount are in ISK thousand
18
11
Fjárhæðir í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 4.
Use of estimates and judgements The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Information on important decisions where management’s estimates and accounting policies have the greatest impact on the recorded amounts of assets and liabilities in the financial statements can be found in the following notes: • Note 11 – Estimation of the useful life of fixed assets • Note 12 – Estimation of the useful life of intangible assets • Note 13 and 14 – Estimation of allowances for long-term receivables and accounts receivable • Note 15 – Estimation of allowances for inventory • Note 16 – Estimation of the fair value of assets classified for sale • Note 17 – Estimation of the lease period and discount rate
5.
Revenue The Group's revenue is specified as:
2019
Domestic postal service ...................................................................................... Foreign postal service .........................................................................................
2018
5.526.850 824.354
5.859.247 852.752
6.351.204
6.711.999
Information on the timing of revenue recognition can be found in note 24 on accounting policies for revenue recognition.
6.
Salaries and related expenses 2019
2018
Salary .............................................................................................................. Pension fund ..................................................................................................... Other salary related expenses ............................................................................. Other employee cost ..........................................................................................
4.117.843 545.140 355.306 127.110
4.368.986 518.702 370.837 181.587
Salaries and related expenses .............................................................................
5.145.400
5.440.112
The average number of full-time positions .............................................................
721
822
Salaries and benefits of the Board of Directors and key management personnel amounted to ISK 207,6 million this year (2018: ISK 126 million). Of that the CEO’s salary was ISK 41,6 million (2018: 25 million) and salaries to the members of the Board of Directors ISK 14 million (2018: ISK 12 million). Pension fund contributions amounted to ISK 29,1 million (2018: ISK 17,4 million). The salary for the Chairman of the Board is twice the salary of the other Board members. Agreements with the Company’s managers do not provide for options to purchase shares in the Company or special payments upon termination of employment. The notice period for managers is mutual 6 months for both parties but 12 months for the CEO. Part of the year there were two CEOs receiving salaries, also some managers who left the Company this year. The Company is committed to pay an additional contribution to the Pension Fund for State Employees, which amounts to 6% of the difference between the total salary and the reference salary of the employees who exercise the right to pay contributions to the fund while they work for the Company. The cost of restructuring operations in 2019 was ISK 225 million and is recognized in a line in the income statement. The balance sheet obligation at year-end is ISK 70 million and is recognized among current liabilities.
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
12
Fjárhæðir í þúsundum króna
19
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 7.
Auditor's fees Fees to the Icelandic National Audit Office are specified as follows: 2019 Audit of the financial statements .......................................................................... Review of interim financial statements ..................................................................
8.
6.636 2.768
4.690 5.065
9.404
9.755
Depreciation and amortization Depreciation and amortization are specified as follows:
2019
Depreciation of property, plant and equipment, see note 11 .................................... Amortization of intangible assets, see note 12 ....................................................... Depreciation of right-to-use assets, see note 17 ....................................................
9.
2018
2018
466.118 62.804 117.331
361.627 39.159 0
646.253
400.786
Financial income and financial expenses Financial income is specified as follows:
2019
Share capital gains ............................................................................................ Dividends from share investments ........................................................................ Interest income .................................................................................................
2018
0 16.429 17.406
10.257 17.325 45.785
33.835
73.367
(1.653) (190.204) (17.434) (88.798) (1.222) (2.245)
(30.701) (148.050) 0 0 (1.088) (8.045)
(301.557)
(187.884)
7.290
101.859
(260.432)
(12.658)
Financial expenses are specified as follows: Interest expense on short-term debt to credit institutions ....................................... Interest expense and indexation of long-term debt ................................................. Interest expense on financing leases .................................................................... Loss due to share investments ............................................................................. Penalty fees ...................................................................................................... Other interest expense .......................................................................................
The exchange rate difference between financial assets and financial liabilities is as follows: Net exchange rate difference ...............................................................................
10.
Income tax Income tax is calculated and recognized in the Consolidated Financial Statements and the amount recognized in the income statement amounts to ISK 116,8 million. (2018: Revenue recognized amounting to ISK 72,3 million). Income tax will not be paid in 2020, as the Company's income tax base is negative.
The effective income tax is identifies as follows:
2019 Fjárhæð
(Loss) before income tax ..................................
(641.011)
2018 Fjárhæð
%
(362.998)
Tax rate ......................................................... Nontaxable revenue .......................................... Discontinued operations ..................................... Subtractable costs ............................................. Other items .................................................... Impact of tax losses ..........................................
128.202 3.286 1.883 (15.736) (827) 0
-20,0% -0,5% -0,3% 2,5% 0,1% 0,0%
72.600 4.509 (641) (1) 0 (4.154)
-20,0% -1,2% 0,2% 0,0% 0,0% 1,1%
Calculated income tax ......................................
116.808
-18,2%
72.313
-19,9%
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
20
%
13
Fjárhæðir í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 11.
Property, plant and equipment Real estate and land
Equipment and vehicles
Total
Cost Balance January 1, 2018 ........................................................ Reclassification of intangible assets ......................................... Capitalized during the year ..................................................... Assets classified for sale ......................................................... Sold and disposed of during the year ....................................... Balance January 1, 2019 ........................................................
3.266.110 0 858.086 8.270 (46.612) 4.085.854
3.768.430 (187.099) 338.754 0 (331.009) 3.589.076
7.034.540 (187.099) 1.196.840 8.270 (377.621) 7.674.930
Disposed due to sales of subsidiaries ....................................... Reclassification between classes of PPE .................................... Reclassification of non-current assets ....................................... Capitalized during the year ..................................................... Assets classified for sale ......................................................... Sold and disposed of during the year .......................................
0 461.583 (223.403) 354.540 (262.080) (123.481)
(26.519) (461.583) 0 90.399 (98.148) (217.530)
(26.519) 0 (223.403) 444.939 (360.228) (341.011)
Balance December 31, 2019 ...................................................
4.293.013
2.875.695
7.168.708
Accumulated depreciation Balance January 1, 2018 ........................................................ Reclassification of intangible assets ......................................... Depreciation of the year ......................................................... Depreciation reclassified due to discontinued assets ................... Assets classified for sale ......................................................... Sold and disposed of during the year .......................................
1.602.425 0 122.345 2.643 2.977 (34.194)
2.081.779 (101.525) 239.282 10.851 0 (247.965)
3.684.204 (101.525) 361.627 13.494 2.977 (282.159)
Balance January 1, 2019 ........................................................
1.696.196
1.982.422
3.678.618
Disposed due to sales of subsidiaries ....................................... Depreciation of the year ......................................................... Assets classified for sale ......................................................... Sold and disposed of during the year .......................................
0 163.335 (34.673) (146.563)
(18.659) 302.782 (45.939) (161.899)
(18.659) 466.117 (80.612) (308.462)
Balance December 31, 2019 ...................................................
1.678.295
2.058.707
3.737.002
Book value Book value January 1, 2018 .................................................... Book value December 31, 2018 ............................................... Book value December 31, 2019 ...............................................
1.663.685 2.389.658 2.614.718
1.686.651 1.606.654 816.989
3.350.336 3.996.312 3.431.707
Depreciation rates .................................................................
0-4%
10-33%
The company's assets are covered by collateral bonds and bonds to guarantee outstanding debt in the amount of ISK 1,618 million. All the company's properties are pledged. Real estate and insurance valuation of the Group's assets at year-end:
Real estate and land .............................................................. Equipmment, vehicles and propperty insurance .........................
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
14
Real estate valuation
Insurance valuation
Book value
2.284.999
4.374.432 2.987.618
2.614.718 816.989
Fjárhæðir í þúsundum króna
21
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 12.
Intangible assets Hugbúnaður Cost Balance January 1, 2018 ................................................................................................................. Reclassification .............................................................................................................................. Capitalized during the year ............................................................................................................. Sold and disposed of during the year ................................................................................................ Balance December 31, 2018 ............................................................................................................
300.120 187.099 45.607 (38.560) 494.266
Balance January 1, 2019 ................................................................................................................. Assets classified for sale ................................................................................................................. Capitalized during the year .............................................................................................................
494.266 (3.881) 39.322
Balance December 31, 2019 ............................................................................................................
529.707
Accumulated amortization Balance January 1, 2018 ................................................................................................................. Reclassification .............................................................................................................................. Amortization of the year ................................................................................................................. Amortization reclassified due to discontinued assets ........................................................................... Sold and disposed of during the year ................................................................................................ Balance December 31, 2018 ............................................................................................................
257.031 101.525 39.159 741 (38.417) 360.039
Balance January 1, 2019 ................................................................................................................. Assets classified for sale ................................................................................................................. Depreciation of the year .................................................................................................................
360.039 (811) 62.804
Balance December 31, 2019 ............................................................................................................
422.032
Book value Book value January 1, 2018 ............................................................................................................ Book value December 31, 2018 ....................................................................................................... Book value December 31, 2019 .......................................................................................................
43.089 134.227 107.675
Amortization rate ...........................................................................................................................
20%
Cost and accumulated amortization of software, previously recognized among property, plant and equipment, have been reclassified to intangible assets. Balance at the beginning of 2018 in the table above was reclassified in the line Balance January 1, 2018 and software additions in 2018 are reclassified and shown in the Reclassification line. Comparative figures in the balance sheet have been adjusted in accordance with the above.
13.
Long-term receivables and bond holdings 2019
2018
Balance at January 1, 2019 ................................................................................. Additions .......................................................................................................... Deposits during the year .....................................................................................
760.127 886.066 (988.498)
744.455 935.488 (919.816)
Balance at December 31, 2019 ............................................................................ Short-term portion of long-term receivables ..........................................................
657.695 (87.699)
760.127 (38.619)
Balance at December 31, 2019 ............................................................................
569.996
721.508
Long-term receivables on foreign postal entities are classified as non-current assets. These are receivables arising from settlement of terminal station income and fees for cross-border mailing. Bond holdings at year-end amounted to ISK 6,5 million (2018: ISK 0) of which ISK 3,25 million payable next year.
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
22
15
Fjárhæðir í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 14.
Account receivables
Account receivables ........................................................................................... Allowance for doubtful accounts ...........................................................................
31.12.2019
31.12.2018
917.057 (147.431)
1.053.297 (154.615)
769.626
898.682
Changes in allowance for doubtful accounts during the year is as follows: Balance at January 1, 2019 ................................................................................. Disposed due to discontinued operations ............................................................... Change in allowance .......................................................................................... Bad debt expense during the year ........................................................................
(154.615) 13.375 4.403 (10.594)
(170.118) 0 16.520 (1.017)
Balance at December 31, 2019 ............................................................................
(147.431)
(154.615)
The allowance is based on management’s judgement and experience from previous years. Accounts receivables are derecognized when they are truly lost under, in accordance with Act no. 90/2003. 15.
Inventory 31.12.2019 Inventory of operating and sales products ............................................................. Stamp inventory ................................................................................................
31.12.2018
81.512 57.799
88.969 88.873
139.311
177.842
The inventory write-off for the year amounted to ISK 29,4 million and ISK 210 million for the cost of goods sold.
16.
Assets held for sale and discontinued operations In 2019, Íslandspóstur ohf. sold two subsidiaries, Gagnageymslan ehf. and Frakt flutningsmiðlun ehf. These operations are classified as discontinued operations in the Consolidated Income Statement and comparative figures have been adjusted in accordance with IFRS 5. At year-end, Íslandspóstur ohf. had two subsidiaries, Samskipti ehf. and Trönur ehf. The two subsidiaries, together with two other properties owned by the Company, have been classified among assets for sale and discontinued operations as all conditons for this classification under IFRS 5 are met. When operations are defined as for sale, comparative figures are adjusted in accordance with IFRS 5. The sale of subsidiaries and assets is a part of the Company’s actions to focus on the core business. The effect of discontinued operations on the consolidated income statement:
2019
2018
Revenue ...........................................................................................................
212.212
974.042
Expense ...........................................................................................................
(215.032)
(975.821)
(67)
(190)
Income tax ....................................................................................................... Profit from sale of discontinued operations ............................................................
16.268
Profit (loss) of discontinued operations
13.381 31.12.2019
0 (1.969) 31.12.2018
Intangible assets ...............................................................................................
2.371
0
Property, plant and equipment .............................................................................
430.592
0
Deferred tax asset .............................................................................................
521
0
Inventory .........................................................................................................
7.724
0
Accounts receivable and other receivable ..............................................................
59.408
0
160
0
500.776
0
Cash and cash equivalents .................................................................................. Assets held for sale Interest-bearing debt .........................................................................................
6.708
0
Accounts payable and other short-term liabilities ...................................................
19.227
0
Liabilities held for sale
25.935
0
Cash flow from discontinued operations Operating activities............................................................................................. Investing activities.............................................................................................. Financing activities............................................................................................... Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
16
2019 5.604 (5.441) (42.527)
2018 0 0 0 Fjárhæðir í þúsundum króna
23
Notes to the Consolidated Financial Statments
Notes to the Consolidated Financial Statments
17.
Leases As of Janary 1, 2019, changes were made to accounting of operating leases in the lessee’s financial statements. Instead of recognizing operating lease expense on a straight-line basis over the term of the lease, the Group now, with a few exceptions, recognizes a right-of-use asset and a lease liability at commencement for all leases. A more detailed description of accounting policies for leases can be found in note 26. The Company has entered into lease agreements for real estate that are recognized in the consolidated statement of financial position. More information about the right-of-use and lease liability can be found below. Right-of-use asset
Real estate
Recognized on initial application, January 1, 2019 .............................................................................. Adjustments for indexed leases ....................................................................................................... New leases ................................................................................................................................... Amendments to existing leases ........................................................................................................ Depreciation ................................................................................................................................. Balance at December 31, 2019 ........................................................................................................ Duration of contracts
274.210 14.158 499.687 (31.917) (117.331) 638.807 1-15 years
Amounts recognised in profit and loss
2019
Depreciation expense from right-of-use assets .................................................................................. Interest expense on lease liabilities .................................................................................................. Short-term lease expense ............................................................................................................... Total amount recognized in profit and loss ........................................................................................
Lease liability
117.331 17.434 12.995 147.760
Real estate
Recognized on initial application, January 1, 2019 .............................................................................. Adjustments for indexed leases ....................................................................................................... New or renewed leases ................................................................................................................... Amendments to previous agreements ............................................................................................... Interest expense on lease liabilities .................................................................................................. Lease payments during the period .................................................................................................... Current maturities ......................................................................................................................... Balance at December 31, 2019 ........................................................................................................
292.620 14.158 499.687 (31.917) 17.434 (140.244) (99.397) 552.341
Lease liability Maturity analysis, undiscounted lease payments Not later than 1 year ...................................................................................................................... Later than 1 year and not later than 5 years ...................................................................................... Later than 5 year ........................................................................................................................... Total undiscounted lease payments
100.898 269.430 493.972 864.300
Short-term liabilities ...................................................................................................................... Non-current liabilities ..................................................................................................................... Lease liabilities on consolidated statement of financial position at December 31
99.397 552.341 651.738
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
24
31.12.2019
17
Fjárhæðir í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 18.
Equity Share capital Share capital is specified as follows: Total share capital as of 31.12.2019 ........................................
Shares
Proportion
Amount
2.947.500
100,0%
2.947.500
At the beginning of the year the share capital was ISK 1.447,5 million, shares issued during the year amounted to ISK 1.500 million, the total share capital at year-end was ISK 2.947,5 million. The nominal value of each share is ISK 1 and each equals one vote. Statutory reserve According to the Icelandic Act on Limited companies, the Company must invest 25% of the nominal value of the share capital to the statutory reserve. A proposal to the statutory reserve shall amount to at least 10% of profit for the year until the reserve ratio amounts to 10% of the nominal value of the share capital, after which the proposal is at least 5% of the profit until the reserve rate is 25% of the nominal value of the share capital. Restricted equity Restricted equity is the result of share income in excess of dividends received in accordance with paragraph 5, Article 41 of Act no. 3/2006 on Financial statements. 19.
Interest-bearing liabilities Interest-bearing liabilities is specified as follows: Interest-bearing liabilities 31.12.2019 31.12.2018 Indexed liabilities in ISK ..................................................................................... Non-indexed liabilities in ISK ............................................................................... Liabilities in EUR ................................................................................................ Liabilities in CHF ................................................................................................ Liabilities in JPY .................................................................................................
1.952.985 0 0 0 0 1.952.985
Current maturities on interest-bearing liabilities .....................................................
(302.063)
Interest-bearing liabilities at year-end ..................................................................
1.650.922
2.169.710 95.136 19.514 18.019 6.288 2.308.667 (281.947) 2.026.720
Maturities on interest-bearing liabilities is specified as follows: Interest-bearing liabilities 31.12.2019 31.12.2018 Maturity Maturity Maturity Maturity Maturity Maturity Maturity
2020/2019 ........................................................................................... 2021/2020 ........................................................................................... 2022/2021 ........................................................................................... 2023/2022 ........................................................................................... 2024/2023 ........................................................................................... 2025/2024 ........................................................................................... later ....................................................................................................
302.063 308.320 314.952 197.779 197.779 188.483 443.610
281.947 294.749 305.711 308.715 202.045 192.558 722.941
1.952.986
2.308.666
31.12.2019
31.12.2018
4,3%
5,0%
The weighted average interest rates are as follows: Interest-bearing liabilities.................................................................................... Transactions due to interest-bearing liabilities Balance at January 1, 2019.................................................................................. Reclassified due to sale of assets and discontinued operations.................................. Maturities.......................................................................................................... New loans.......................................................................................................... Price indexation and exchange rate difference........................................................ Balance at December 31, 2019.............................................................................
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
18
2019
2018
2.308.667 (2.895) (1.014.924) 603.400 58.737 1.952.985
1.738.874 0 (199.135) 680.624 88.304 2.308.667
Fjárhæðir í þúsundum króna
25
Notes to Consolidated Financial Statments Notes tothe the Consolidated Financial Statments 19.
Interest-bearing liabilities, contd. Current interest-bearing liabilities:
Maturity 2020.................................................................................................... Loans from the Central Bank of Iceland.................................................................. Short-term loans with credit institutions................................................................
31.12.2019
31.12.2018
302.063 0 0 302.063
281.947 500.000 17.384 799.331
In 2019, a loan from the Central Bank of Iceland was converted into share capital, as shown in note 18. 20.
Deferred tax assets Deferred tax assets 2019 Balance at January 1, 2019.................................................................................. Effects of IFRS 16 implementation ......................................................................... Disposed on sale of subsidiaries ........................................................................... Difference between taxed and government charges for the previous year .................... Calculated income tax for the year ......................................................................... Balance at December 31, 2019.............................................................................
2018
70.340 3.682 (2.802) 847 116.808 188.875
(4.231) 0 0 2.259 72.312 70.340
31.12.2019
31.12.2018
(6.761) 2.586 12.398 (7.763) 188.415
(39.642) 0 17.006 (12.422) 105.398
188.875
70.340
Deferred tax assets are indentified on individual items as follows: Property, plant and equipment .............................................................................. Lease liability ...................................................................................................... Current financial assets ........................................................................................ Deferred exchange rate difference ......................................................................... The effect of carry-forward tax losses .....................................................................
The tax loss carry-forward is deductible at the earliest, as follows: From profit of the year in 2028 ........................................................................................................ From profit of the year in 2029 ........................................................................................................
516.435 425.643 942.078
21.
Other current liabilities 31.12.2019 VAT ................................................................................................................... Prepaid income ................................................................................................... Accrued salary and related expenses ...................................................................... Other short-term liabilities ....................................................................................
22.
59.026 27.371 623.136 53.528 763.061
31.12.2018 32.222 31.371 542.274 23.722 629.589
Related parties The Company’s related parties are the Icelandic State and companies and institutions belonging to it, as well as the Company’s Board of Directors, its key management personnel and their close family members. The Company trades with related parties and the transactions are priced as if it were an unrelated party.
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
26
19
Fjárhæðir í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 23.
Financial risk management The Group manages its capital so that it maintains its going concern while maximizing the profitability of its stakeholders with the best balance between liabilities and equity. The Company is not required to comply with external rules on minimum capital adequacy. The Company’s management monitor and analyze financial risks in operations. Risk management methods reviewed regularly to identify changes in the Company’s market and operations. The following risks have been identified for financial instruments.
Fair value The difference between fair value and book value of financial assets and financial liabilities are insignificant. Market risk The Company‘s main risk factors are changes in currency exchange rates, changes in interest rate and inflation. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. Currency risk Part of the Group’s financial assets and financial liabilities is in foreign currency, exposing the Group to risks due to changes in the exchange rate of the relevant currencies against the Icelandic króna. The Group seeks to minimize currency risk by monitoring exchange rate developments and by appropriately combining financial assets and financial liabilities in major trading currencies. The Group does not normally hedge against currency risk. Below are listed the foreign currencies that mainly affect the Company’s operations. Their exchange rates and balance are based on the closing price of the period.
December 31, 2019 EUR ................................................................ NOK ................................................................ SEK ................................................................. DKK ................................................................ USD ................................................................ XDR ................................................................ GBP ................................................................
December 31, 2018 EUR ................................................................ NOK ................................................................ SEK ................................................................. DKK ................................................................ USD ................................................................ XDR ................................................................ CHF ................................................................. JPY ................................................................. GBP ................................................................
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
Exchange rate 135,8 13,8 13,0 18,2 121,1 167,8 159,4
Exchange rate 133,2 13,4 13,0 17,8 116,3 161,8 118,2 1,1 148,3
20
Assets
Liabilities
Net exposure
184.505 30.341 26.086 5.278 2.231 389.200 141.879
9.232 0 0 4.101 9.935 9.090 0
175.273 30.341 26.086 1.177 (7.704) 380.110 141.879
779.520
32.358
747.162
Assets
Liabilities
Net exposure
190.220 23.839 24.299 3.428 2.103 156.976 0 0 0 400.865
32.513 0 0 3.097 88.329 10.915 17.955 6.269 0 159.078
157.707 23.839 24.299 331 (86.226) 146.061 (17.955) (6.269) 0 241.787
Fjárhæðir í þúsundum króna
27
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 23.
Financial risk management, contd. The table below shows what effects a 5% and 10% increase of the relevant foreign currency rate against the ISK would have on P/L and equity based on the balance of assets and liabilities in the applicable currency at the reporting date. The table above shows the balance of assets and liabilities in foreign currencies that the sensitivity analysis covers. The analysis assumes that all other variables, excluding the relevant foreign currency rate, are held constant. The sensitivity analysis covers those currencies that have the highest currency risk. It does not take into account tax effects and comparative figures were prepared in the same manner. The effect on P/L and equity is the same since the change in valuation of the underlying financial instruments in foreign currency is in no case recognized directly in equity. A positive number below indicates an increase in P/L and equity. A decrease of ISK exchange rate against the currencies listed below would have an opposite impact on P/L and equity. 31.12.2019 5%
Effect on P/L and equity EUR ................................................................ NOK ................................................................ SEK ................................................................. DKK ................................................................ USD ................................................................ XDR ................................................................ CHF ................................................................. JPY ................................................................. GBP ................................................................
8.764 1.517 1.304 59 (385) 19.006 0 0 7.094 37.359
10% 17.527 3.034 2.609 118 (770) 38.011 0 0 14.188 74.717
31.12.2018 5% 7.885 1.192 1.215 17 (4.311) 7.303 (898) (313) 0 12.090
10% 15.771 2.384 2.430 33 (8.623) 14.606 (1.796) (627) 0 24.178
Interest rate risk Interest rate risk is the risk that the fair value or future cash flow of financial instruments will fluctuate due to changes in market rates. Interest rate risk arises because of the Group’s non-current liabilities carry both fixed and variable interest rates. The risk is controlled by monitoring interest rates and by borrowing loans with an appropriate combination of fixed and variable rates. Interest rates on the Group’s borrowings are presented in note 19 for interest-bearing liabilities. Interest-bearing liabilities that carry variable interest rate amount to ISK 1.619 million (December 31, 2018: 1.887 million) and fixed interest amount to ISK 334 million (December 31, 2018: 921 million). The table below shows the effect of a 50 and 100 point increase in interest rates on P/L and equity at the reporting date. The sensitivity analysis covers the interest-bearing assets and liabilities that carry variable interest rates and assumes that all other variables, excluding the relevant interest rates, are held constant. The sensitivity analysis reflects the effects that appear in the P/L and equity without tax effects.
Effect on P/L and equity .....................................
50 p.
31.12.2019 100 p.
5.284
10.568
31.12.2018 50 p. 8.468
100 p. 16.936
Inflation risk Interest-bearing liabilities for the amount of ISK 1.952 million are indexed based on the Consumer Price Index (December 31, 2018: ISK 2,169 million). Therefore, the development of the consumer price index affects the carrying amount of the loans and cash flow related to them. An increase in inflation of 1% over the year would have lowered the Group’s P/L by ISK 19,5 million before income tax (2018: ISK 21,7 million). The sensitivity analysis assumes that all other variables, other than those under review, are held constant.
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
28
21
Fjárhæðir í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 23.
Financial risk management, contd. Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Company’s management regularly monitor the development of credit-related assets and a credit policy has been implemented for the approval of new customers as well as receiving bank guarantees to minimize credit risk. This credit policy are reviewed regularly to reflect the changing circumstances of the counterparty. Underlying collateral is not taken into when assessing the maximum loan risk. The maximum credit risk is the carrying amount detailed below: Bonds and other long-term receivables ................................................................. Accounts receivable ........................................................................................... Other short-term receivables ............................................................................... Cash and cash equivalents ..................................................................................
31.12.2019
31.12.2018
569.997 769.626 120.877 562.204 2.022.704
715.786 898.682 78.519 198.478 1.891.465
The tables below show the carrying amount of financial assets by age (number of days past maturity) and classification: Bonds and other recei.
December 31, 2019 Not reached maturity ....................................... 1-30 daga ...................................................... 31-60 daga ..................................................... 61-90 daga .....................................................
Accounts receivable
Other short-term receivable
Total
707.409 20.483 31.902 9.832 769.626
120.877
1.398.283 20.483 31.902 9.832 1.460.500
Accounts receivable
Other short-term receivable
715.786
811.422 52.661 11.364 23.235
78.519
1.605.727 52.661 11.364 23.235
715.786
898.682
78.519
1.692.987
569.997
569.997 Bonds and other recei.
December 31, 2018 Not reached maturity ....................................... 1-30 daga ...................................................... 31-60 daga ..................................................... 61-90 daga .....................................................
120.877 Total
The Company evaluates the allowance for doubtful accounts based on the likelihood of an default during the lifetime of the receivables. Accounts receivable are divided into age categories and allowances are estimated for each category based on previous years’ experience, management’s estimates and future prospects in the customer’s economic environment. The Group’s management believes that the carrying amount of accounts receivable and other short-term receivables reflect their fair value. No allowance is recognized for long-term receivables and bonds, as managers estimate the risk of loss and the effect of recognizing a credit-loss would be insignificant. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations within the required time limits. The Company’s management monitor the liquidity position by analyzing the maturity of financial assets and liabilities to ensure that the Group can reimburse their liabilities at maturity. Liquidity position, developments on the market and the impact of market conditions and future prospects on the Group are regularly monitored. The Company received an increase in share capital during the year and a ISK 500 million loan was converted into share capital, as well as ISK 970 million in cash to resolve the Company’s debt problems. The capital was used to pay off interest-bearing liabilities.
Liabilities at December 31, 2019: 2023 Within a year Non-interest-bearing ................ Variable interest rates .............. Fixed interest rates .................. Lease liability ..........................
1.248.849 231.547 121.194 129.729 1.731.319
2021 231.682 121.035 106.907 459.624
2022 231.522 122.723 93.285 447.530
or later 1.218.198 745.620 1.963.818
Total 1.248.849 1.912.949 364.952 1.075.542 4.602.292
Liabilities at December 31, 2018:
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
22
Fjárhæðir í þúsundum króna
29
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 2022 Within a year Non-interest-bearing ................ Variable interest rates .............. Fixed interest rates ..................
24.
2020
2021
or later
Total
1.286.678 264.587 640.546
262.732 121.194
257.972 121.035
1.497.940 122.723
1.286.678 2.283.231 1.005.498
2.191.811
383.926
379.007
1.620.663
4.575.407
Accounting and financial separation Regulation 313/2005 imposes requirements on accounting and financial separation of postal operators. The regulation includes provisions on implementation of such separation and on disclosure requirements to the Post and Telecom Administration (PTA). In accordance with the requirements of the regulation Íslandspóstur annually submits to PTA its accounting separation and cost accounting. The PTA issued on December 13, 2019 a summary of Íslandspóstur’s accounting separation from 2018 operation and concluded from its review of the underlying data and cost accounting, that Íslandspóstur’s cost accounting and accounting separation was in line with acceptable methodology and legal requirements of the aforementioned regulation on accounting and financial separation of postal operators. The results of the accounting and financial separation for the 2019 operation will be provided to the PTA as instructed in the regulation.
25.
Other information about the operating environment The Icelandic State has decided to impose on the Company a universal service obligation, which is to ensure that all citizens have equal access to certain aspects of postal services, both domestically and internationally, with certain quality at the same price according to paragraph 2 of Article 17 of Act no. 98/2019. Therefore, the Company has a universal service obligation that covers shipments of up to 10 kilograms. With it comes the obligation to handle those aspects of the service that are not profitable. No formal contract for universal service has been concluded, but the Company has been temporarily designated as a universal service provider. The universal service has been partially funded for 2020 but will be reviewed during the year.
26.
Accounting policies The Group The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Subsidiaries are companies where the Parent Company has full control over the entity. Control is achieved where the Company has the power to govern the financial and operating policies of an entity to obtain benefits from its activities. At the reporting date, the Company re-evaluates whether control exists with respect to the above factors. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Necessary adjustments are made to the financial statement of subsidiaries to bring their accounting policies into line with those used by other members of the Group. The objective of the preparation of the consolidated financial statements is to disclose only the Group’s income, expenses, assets and liabilities externally and. Therefore, all intra-group transactions, balances, income and expenses are eliminated in full on consolidation. Revenue recognition The Company’s revenue recognition reflects the remuneration that the Group expects to receive as a result of a sale of services and products to the customer. The Company's revenues from contracts with customers are mainly generated by the sale of postal services, which includes, among other things, distribution of letters, parcels, mail and related services. Revenue is recorded when the Company’s contractual obligations have been fulfilled. Service revenues are recognized, as the case may be, at the time the service was provided, or at the same time as the service is provided. Sale of goods are recognized when goods are delivered and the Company has transferred to the buyer the significant risks and rewards of ownership of the goods. Revenues are shown in the income statement with regard to discounts. Revenue that has been collected during the fiscal year but relates to subsequent fiscal years is recognized in the balance sheet as a pre-collected income. Foreign mail revenues relating to the fiscal year are recognized as long-term receivables, but these are receivables from foreign postal companies that arise from the settlement of cross-border mail transactions, deposits for the receivables can take up to two and a half year from when the transaction takes place.
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
30
23
Fjárhæðir í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 26.
Accounting policies, contd. Impairment of assets other than financial assets At each balance sheet date, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specified to the asset. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment losses on cash generating units reduces first goodwill, and after that to reduce other assets. Impairment losses are recognized as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. Impairment loss on goodwill is not reversed. Financial assets Financial assets are recognized at fair value on initial recognition. When financial assets are not measured at fair value through profit or loss, all direct transaction costs are recognized to increase their value at initial recognition. The Group recognizes all its financial assets at amortized cost. Financial assets consist of long-term receivables, bonds, accounts receivables, short-term receivables with the exception of prepaid expenses and deductions taxes, holdings in other companies and cash. Financial assets that are estimated to be held-to-maturity and their contractual cash flow consist only of principal and interest payments shall be recognized at amortized cost unless the instrument is defined as a fair value through profit or loss in accordance with the fair value option. Such assets are initially recognized at fair value plus all related transaction costs. After initial recognition, such financial assets are measured at amortized cost based on effective interest rate, less impairment. The Group's financial assets that are valued at amortized cost are long-term receivables, trade receivables, other short-term receivables, holdings in other companies, related party requirements and cash. Cash and cash equivalents The Group‘s cash and cash equivalent consist of cash and bank balances. Impairment of financial assets The IFRS 9 impairment model is based on expected credit loss. The Group's financial assets that fall within the scope of the impairment model are long-term receivables, accounts receivable, other short-term receivables (with the exception of prepayments and deductions taxes), related party requirements and cash. When evaluating expected credit loss for accounts receivable, the Group uses a simplified approach. This approach assumes that the Group evaluates an allowance that is equal to expected credit loss during the life of the receivables. The Group's accounts receivable are subdivided into categories according to the number of days over maturity. When estimating a fixed allowance ratio for each category, the Group’s bad debts are taken into account in historical context, adjusted for future economic development expectations if needed. See detailed discussion of expected credit loss for accounts receivable in note 23. At each settlement date, it is examined whether there is objective evidence of impairment of financial assets. A financial asset has been impaired if there is objective evidence that one or more events that have occurred will affect the expected future cash flow of the asset and that impairment can be reliably estimated. The Group makes a specific impairment of financial assets where there is an objective indication of impairment. Impairment is expensed in the consolidated statement of comprehensive income. Impairment is reversed if the reversal can be objectively linked to events that occurred after the impairment was recognized.
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
25
Fjárhæðir í þúsundum króna
31
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 26.
Accounting policies, contd. Leases The Group evaluates whether a contract is or contains a lease, at inception of the contract. The Group recognizes a right-ofuse asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for shortterm leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The lease liability and the right-of-use asset is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. The lease payments included in the measurement of the lease liability comprise fixed payments less any incentives, variable lease payments that depend on an index or rate, expected residual guarantees and the exercise price of purchase options if the Group expects to exercise the option. The Group re-evaluates the lease liability if the lease term has changed, when lease payments changes in an index or rate or when a lease contract is modified and the modification is not accounted for as a separate lease. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfer’s ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. Financial liabilities The Group's financial liabilities consist of accounts payable, other short-term liabilities and interest-bearing liabilities. Other financial liabilities, including interest-bearing liabilities, were initially measured at fair value less transaction costs. For subsequent recognition, they are recognized at amortized cost based on effective interest rate. The Group derecognizes financial liabilities only when an obligation due to them no longer exists.
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
32
26
Fjárhæðir í þúsundum króna
ÁRSSKÝRSLA 2019
ANNUAL REPORT
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments 26.
Accounting policies, contd. Leases The Group evaluates whether a contract is or contains a lease, at inception of the contract. The Group recognizes a right-ofuse asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for shortterm leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The lease liability and the right-of-use asset is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate. The lease payments included in the measurement of the lease liability comprise fixed payments less any incentives, variable lease payments that depend on an index or rate, expected residual guarantees and the exercise price of purchase options if the Group expects to exercise the option. The Group re-evaluates the lease liability if the lease term has changed, when lease payments changes in an index or rate or when a lease contract is modified and the modification is not accounted for as a separate lease. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfer’s ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. Financial liabilities The Group's financial liabilities consist of accounts payable, other short-term liabilities and interest-bearing liabilities. Other financial liabilities, including interest-bearing liabilities, were initially measured at fair value less transaction costs. For subsequent recognition, they are recognized at amortized cost based on effective interest rate. The Group derecognizes financial liabilities only when an obligation due to them no longer exists.
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
26
Fjárhæðir í þúsundum króna
33
Notes to the Consolidated Financial Statments Notes to the Consolidated Financial Statments Non-financial information Íslandspóstur ohf. plays a vital role in connecting people, businesses and communities by disseminating important information, data and products to the Icelandic people and their customers wherever they are in the country. The staff of Íslandspóstur handle hundreds of thousands daily mailings. In addition, Íslandspóstur is in close cooperation with postal companies all over the world to ensure the density of the distribution system. Postal service plays an important role, not least for businesses, and plays a key role in online business. The recent European Commission’s policy on Digital Single Market (DSM) emphasizes the importance of active and reliable postal services as the basis for active cross-border online business. Social responsibility Íslandspóstur ohf. places great emphasis on corporate social responsibility and wants to work in harmony with the environment and society. Environmental impact has been systematically managed by, among other things, driving electric vehicles and reducing paper usage. Promote the healthy life of employees by raising their awareness of the matter. For example, the participation in the UN Global Compact where Íslandspóstur commits itself to implement policies and procedures in accordance with ten internationally recognized fundamental rights regarding human rights, labor, environmental and corruption.
Íslandspóstur ohf. has undergone an audit by KPMG on risk assessment according to Act no. 140/2018 and is working according to it. Human resources Approximately 900 employees work for Íslandspóstur and perform 721 full-time positions. Íslandspóstur has received equal pay certification and is working systematically to eliminate gender pay gap. The education department of the Company has been doing outstanding educational work and strengthening managers has been a focus point, along with newcomer training, education regarding implementation of the privacy policy and service and quality policy. During the year, Eloomi’s educational website was introduced to be even better equipped to conduct employee training. An annual health and safety week was held with the focus on fire prevention.
Ethics, corruption, bribery and human rights The Company respects the general human rights, everyone’s right to freedom of association and collective bargaining. Emphasis of placed on contractors to comply with applicable laws in the country that apply to all their employees, whether they are employees or subcontractors. The Company has not set a written benchmark for actions regarding ethics, corruption, bribery and human rights. This work is in process and is expected in 2020.
Samstæðuársreikningur Íslandspósts ohf. 2019
Amount are in ISK thousand
34
27
Fjárhæðir í þúsundum króna
Hönnun og umbrot: Elías Jóhann Jónsson Prentun: Samskipti Ljósmyndir: Bernhard Kristinn
Íslandspóstur Höfðabakka 9 110 Reykjavík Sími / Tel +354 580 1000 postur@postur.is www.posturinn.is