Go reports pre-tax loss of €1.3 million

Go has recorded a loss before tax of €1.3 million, representing a negative return of 0.6 percent of the average shareholders’ funds and a negative average total assets employed of 0.4 percent.

In 2007 the group had registered a profit of €27.6 million.

Earnings per share amounted to a negative €0.03 (2007: positive €0.165). These results were a consequence of various one-off transactions, the group said.

The group said that if these oneoff transactions were excluded, the results for the year would reflect a strong operational performance with significant improvements over the prior year.

The group’s turnover amounted to €130.3 million (2007: €131.9 million), a decrease of 1.2 percent over 2007.

This decrease was mainly the result of the group’s discontinuation of its international call centre business as a result of the lack of profitability of this business unit.

Revenue from core services remained strong. The declining trend in traditional fixed line services continued throughout the year, which decline was mitigated by the continued growth in broadband and TV services.

Mobile telephony also continued with its growth rate, albeit at a lower rate.

Overall, the group increased turnover from its core services.

The gross margin for the year amounted to €54.2 million (2007: €51.8 million), equivalent to 41.6 percent (2007: 39.2 percent) of total revenues.

The group registered an operating profit of €11.8 million (2007: €28.6 million). However, results include various one-off transactions, namely a charge for pensions of €12.9 million (2007: nil), voluntary retirement costs of €2 million (2007: €4.3 million) and income from refundable VAT claim of €9.6 million in 2007.

If these transactions were excluded, the group’s operational performance would have improved by 14.6 percent from €23.3 million in 2007 to €26.7 million in 2008. This performance was the result of the group’s revenue performance, the cessation of the loss-making international call centre business, tighter control over costs and a leaner organisation.

During the year under review, the group registered a loss before tax of €1.3 million, namely due to a court judgement on July 7, following which the company had to recognise a charge of €12.9 million in respect of past pension costs. The company and its immediate parent also jointly invested in Forgendo Limited (Forgendo), a special purpose entity incorporated in Cyprus, through which they acquired a shareholding of 34.6 percent in Forthnet SA (Forthnet).

Forthnet is a leading telecommunications service provider in Greece offering broadband, fixed voice and pay TV services.

This investee is a maturing company and in 2008 it registered a net loss of €40.9 million. This loss, which is in line with the expectations of Forgendo, resulted in a charge of €15.6 million for the group. The tax expense for the year amounted to €1.8 million (2007: €10.9 million).

The investment in and loans advanced to Forgendo amount to €94.6 million.

The Company holds 50 percent of the share capital of Forgendo, whilst the Company’s immediate parent holds the other 50 percent. With a 34.6 percent shareholding, Forgendo is the single largest shareholder in Forthnet.

The initial investment, which took place during February 2008, resulted in Forgendo acquiring almost 21 percent of Forthnet’s share capital. This shareholding was subsequently increased to 34.6 percemt through further acquisitions of shares on the market and participation in a rights issue process.