Fothnet CEO optimistic about company’s future

Panagiotis Papadopoulos, chief executive officer of the Greek telecoms company Forthnet, which is partly owned by Go, is optimistic about the future of the company despite the economic situation in Greece.

Interviewed by The Times Business during a visit to Malta where he met stockbrokers and Go’s senior management, Mr Papadopoulos says: “We can’t do anything about the whole macro environment, but we are quite optimistic about the future of the company due to the fact that our services are well positioned in the market and are resistant to this macro environment.

“At the end of the day we sell services which families need. We are optimistic about the future of our company. In 2010, during the economic crisis, we managed to grow by 130,000 broadband additions. We provide good value for money to our customers and to family households. I would like to emphasise the fact that we grew in the middle of a crisis.”

He says the company believes there is room for growth and this is what it is aiming for over the next year.

Mr Papadopoulos points out that it is important for Forthnet to have a direct contact with all its stakeholders to review the status of the company, hence the Malta visit.

How did he react to the fact that Forgendo, the joint vehicle between Go plc and Emirates International Telecommunications, was aiming to acquire majority control of Forthnet?

“When the stakeholders are willing to increase their share in the company this is a clear commitment to the company,” he said calmly.

Forthnet was also reported to be talking to other parties about a possible merger. Does the company still seek a merger given the crowded telecoms market in Greece?

“We have been talking to other companies about a possible merger and acquisition transaction. Our view is that the Greek telecoms market needs consolidation, there are too many companies. At the end of the day consolidation is a good thing for the whole sector. We are open to any discussions which may lead to better value for our shareholders. We are happy to listen to any proposal towards this direction.”

He explains that Forthnet was having talks with its lenders, the major Greek banks, for refinancing over its existing debt.

“This is what we announced during the publication of our current financial results a couple of weeks ago,” he says.

Forthnet’s balance sheet has suffered in the current climate in its home market and both Forthnet and Forgendo have to recognise impairment losses as their investment was revalued to reflect the economic climate in Greece and its impact on company outlook. What measures was the company taking in a bid to revive the books?

“We recognise a growth opportunity and due to the fact that we are a well positioned company we are confident of achieving this. We also understand the need for cost cutting and we are trying to reduce costs as much as possible. So growth opportunities, together with cost cutting efforts of the management will improve our financial situation,” he says.

As at December 31, 2010 Forgendo held 40.99 per cent of Forthnet’s share capital. During 2010 the investment in Forgendo negatively impacted Go’s results by €28.3 million. While Forthnet continued to grow its telecommunications business in 2010, this growth did not make up for the reduced profitability of the TV business.