Positive results for Go plc

Yiannos Michaelides, Go’s chief executive officer, has welcomed the company’s “positive and encouraging results” for the first six months of this year, saying despite competitive and regulatory pressure, it has managed to generate healthy cash flows.

“There is no doubt that this is a result of the group’s investment programme which has allowed it to improve the quality of existing services and widen its product portfolio,” he told stockbrokers and the media during the launch of the company’s interim financial results.

Mr Michaelides said while Go experienced a marginal loss in fixed-line voice connections, it returned to growing its broadband and TV client base, while its mobile client base remained stable.

“The group’s ongoing investments in the mobile core and access infrastructures will continue to strengthen the group’s position in this important segment. During the first half of 2012, the group continued to pursue the rightsizing of its operations, and headcount levels are just below 900. These reductions become possible as the group improves business processes which help improve response time to client needs and further contain costs,” he said.

During the first six months of the current financial year, the group registered an operating profit of €11.4 million, an increase of €2.1 million over 2011. Furthermore, Go also recognised a gain of €11.4 million following the sale of property in Qawra.

While the results of 2011 had been negatively impacted by the impairment of the company’s investment in Forthnet through Forgendo, no material impairment was recognised on this investment during the first six months of this year. Go has therefore reported a profit, before tax, of €20.4 million, compared to a loss of €14.1 million in the comparative period of January to June 2011.

The results for the six month period ended June 2012 and the comparative period were both negatively impacted by voluntary retirement costs and pension obligations, items considered to be of an unusual nature, size or incidence whileduring the six month period ending June 30, 2012, Go secured the recovery of a long outstanding receivable not attributable to trading activities.

The removal of the combined impact of these exceptional items resulted in a normalised operating profit of €10.5 million in 2012 compared to €12.4 million registered in the comparative period. The deterioration in the operating performance of the group is substantially due to lower revenues, which were not compensated for by a decrease in costs.

The group’s revenue amounted to €63.6 million, compared to €65.2 million in 2011, representing a decline of 2.4 per cent, which is essentially the result of a combination of lower retail revenues reflecting intense competition across all product lines and lower wholesale revenues attributable to a reduction in mobile termination rates as mandated by the Malta Communications Authority.