GO records €3.2m pre-tax loss
GO plc said today that it made a pre-tax loss of €3.2 million last year, (2008: Profit €0.3 million) while its operating profit reached €7.4 million as against €13.3 million in 2008.
The group said that while the number of customer connections and services increased significantly in 2009 and amounted to just under 480,000, it had a decline in revenues and profitability.
"However, both 2009 and 2008 results include various one time charges for voluntary retirement costs of €11.5 million (2008: €2 million), write back of provision for pensions of €0.3 million (2008: charge of €12.9 million), impairment loss on receivables of €3.1 million (2008: €0.3 million) and release of financial liabilities of €3.2million (2008: €0.2 million)," GO said.
Normalised operating profit for 2009 amounted to €18.6 million as against €28.3 million in 2008.
The Group achieved a normalised EBITDA of €42.6 million representing an EBITDA margin of 34.4%. Comparative figures show normalised EBITDA of €52.2 million and margin of 40.3%.
"This decline in performance is primarily the result of lower revenue. In fact, Group turnover amounted to €123.7 million, a decline of 4.5% over 2008. Group revenues have also been impacted, positively, by the results of the BM Group in which the Company acquired a 60% strategic shareholding in April."
GO said its 2009 results were negatively affected by the Group’s share of the results of Forthnet in Greece, but said it was encouraging to note that Forthnet continued to register growth in its client base, revenue streams and EBITDA levels and it was confident that in the medium term this investment would start to make a positive contribution.
The Board of Directors is recommending the payment of a final dividend of €0.10c net of tax per share for the approval of the shareholders at the next Annual General Meeting to be held on 17 May 2010 which dividend will be payable on 21 May 2010. This net dividend will be payable to shareholders who will be on the register of shareholders as at 16 April 2010.
Commenting about these results, GO plc Chairman Deepak Padmanabhan said: “2009 has been a challenging year as demand for the Group’s services has been impacted by the international economic climate, increased competitive environment and the impact of regulation of certain tariffs.”
He added: “Demand for the various core services remains strong and the Group continues to manage the decline of traditional fixed-line voice services by maximizing on the growth opportunities of broadband internet and tv services. Revenue from mobile services experienced a decline due to a combination of increased competition and weaker demand due to the economic environment.”
Mr Padmanabhan said in 2009, the Group managed to grow its broadband internet, tv and mobile client base and register only a marginal decline in its fixed-line voice connections. At year end, the Group serviced nearly 480,000 customer connections, an increase of almost 22,000 over 2008. This achievement auger well for the future, he commented.
GO’s Chief Executive Officer David Kay said the Group’s cost base remained stable with most discretionary expenditure in decline. Cost increases were primarily the result of either these being directly related to the operations of the BM Group or to revenue growth areas such as tv.
He added that in 2009, GO pursued a right-sizing programme at a cost of €11.5 million. “This right-sizing programme is part of a larger initiative to restructure the way the Group operates to ensure it can serve its clients better and in a more cost effective manner. This reduced headcount level will deliver a significantly lower cost base in the coming years.”
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c.camilleri
Mar 16th 2010, 20:48
Are these Malta's poor who are so worried and angered about the poor results of Go. I never believed that the poor can have shares.
c.camilleri
Mar 16th 2010, 20:41
@ l galea . Please keep yourself up to-date.. For the fixed line we pay only the rent and we can phone as much as we like..
joe camenzuli
Mar 16th 2010, 18:55
I suggest that in the next general meeting the shareholders should have a vote of no confidence in the present directors. We the share holders needs someone capable of running a well known telecom company and if need be with new director faces.
j micallef
Mar 16th 2010, 17:23
Amazing. I don't care much about the excuses written here and in the blogs. What I know is that I invest in this company when it was meant to be sold to a telecoms giant and sure enough my shares has going down since then! tlifna biss.
J Mangani
Mar 16th 2010, 14:41
...and with their recent spending spree on sports content, their losses can only get bigger. If the persistent rumour in the market is true, then how can GO recover 6 million eurps from few thousands of new sports subscribers?
seems to me that someone at GO needs to work his/her maths better.
francis cini
Mar 16th 2010, 14:05
@ adrian agius
i do not understand why go plc is giving such ex pensioners of cable & wireless such a hard time when they where ordered by court to do so. my father is one of those pensioners , and we his children are still awaiting there payment.i think more hassle is to come for us.
adrian agius
Mar 16th 2010, 12:41
Please note that GO PLC still hasn't paid ex Cable & Wireless workers for the pension scheme which the courts ordered it to pay in early 2008!!!!
T Camilleri
Mar 16th 2010, 17:11
Go to the courts to issue a warrant of seizure to be paid including for expenses and interests.
lgalea
Mar 16th 2010, 11:49
When a call could last a whole day and not like today where you are charged by the minute Maltacom never incurred a loss. So how come that with all the telephone charges having gone up, being charged by the minute, and the company offering different packages for mobile users, diversifying in the TV supply and yet they make a loss?
How about publishing the fantastic salaries and allowances of their executives and how many executives they have so that the people and the shareholders would know how the losses were really incurred?
M Micallef
Mar 16th 2010, 14:36
These are disastruous results and guess what? Next year's will be even worse. GO's biggest cash cows have traditionally been fixed-line and mobile. Revenues from both are declining rapid:ly for various reasons.
Fixed-line is declining as GO continue to lose subscribers to the competing fixed network and usage is also down while revenue from GO Mobile is on the decline due to regulatory price reductions, loss of subscribers to competition and cheaper prices introduced by competition.
Embrace yourself for bigger losses next year.
Tony Mangion
Mar 16th 2010, 11:43
So If minister Austin Gatt will dig deep down into the contract made between his ministry and GO, in an effort to reclaim the land in St. Andrews which belonged to Telemalta, as he should have done years ago, then the record loss for GO would have been much, much more bigger. How on earth there has been a total silence about this land is beyond me to understand!!!.
J Farrugia
Mar 16th 2010, 11:32
It is a very well known fact that in times of recessions, telecom companies do better as more people stay indoors and spend more on home entertainment.
If GO is bucking this trend, then Mr. Deepak should blame it on his Chiefs who day in, day out plaster newspapers with even more statements on how great GO's products are.
I am tired of having grainy pictures on my TV set at home and please, don't dare blaming it on my TV set as it is a brand new Samsung LCD screen! Even worse, why is it that in 2010 my family and I still have a horrible TV experience in bad weather?
Joseph Bartolo
Mar 16th 2010, 11:13
GO lost a lot of good people who took up the early retirement because the re-organisation hit them badly. Some posts were re-assigned without even the courtesy of a formal interview and I suspect this was done so that there could be no recourse by the applicant. Certainly David Kay should hang his head in shame. Its a good thing his contract will eventually expire - all he was good for was to go around the departments telling staff that they are doing a great job, but at the same time reminding everyone about the early retirement scheme !
Albert Farrugia
Mar 16th 2010, 11:03
"We are out of recession. I am very pleased." - Lawrence Gonzi, Prime Minister, March 11, 2010, as quoted by The Times.
David Buttigieg
Mar 16th 2010, 11:05
Do you people ever think before you post comments?
lgalea
Mar 16th 2010, 11:46
He must be living in another galaxy
Reuben Abela
Mar 16th 2010, 11:53
The results mentioned above do not cover any time period when Malta can be considered out of the recession. Hence it is reasonable to see such results when considering it covers an accounting period hit by a global recession.
M Mangion
Mar 16th 2010, 11:59
The article is referring to last year and not 11th March 2010.
M.Buhagiar
Mar 16th 2010, 12:37
@A.Farrugia:
Without entering in the usual political discussions that we all are used to by now, however its only fair to say that as you yourself said, were said in march 2010. Therefore this doesn't in any way mean that in 2009 we did not pass from a recession. Thus your quote, even though accurate, has no relation with this article.