Go shareholders will not be receiving any dividends after the group reported a loss before taxation of €45.2 million on the back of its investment in Greek communications company Forgendo.
According to the financial results for 2011 published yesterday, the company reported “a good operating performance with stable turnover and a healthy operating profit” in Malta.
But events in Greece hit the group hard as the value of Go’s investment in Forgendo took a nose dive. This led Go to recognise a charge of €62.3 million, representing a write down in the value of its shareholding in and amounts receivable from Forgendo to €3.6 million.
Forgendo lost money from its subsidiary Forthnet, which wrote down €128.5 million as a result of the company’s TV arm, Nova.
In view of the events in Greece and issues impacting Forthnet, Go said it did not have the “ability to establish the value of its investment in Forthnet through a value in use assessment”.
Go chairman Deepak Padmanabhan said the negative impact on the company’s investment in Fortnet caused by uncertainty in the Greek economy did not come as a surprise.
He said the group was carefully monitoring the situation and taking a prudent stand. “Overall, Go remains a sound company with a sustainable future, thanks to its relentless efforts to improve its customers’ experience and deliver value propositions.”
Loss per share amounted to 50c3, up from 18c9 the previous year, which prompted the board of directors not to recommend the payment of a dividend.
Go said that, despite a challenging economic environment and increased competition, it managed to keep a stable turnover with only a marginal decrease to €131.6 million from €132.3 million in 2010.
The group registered an operating profit of €18.4 million, down from the €22.8 million in 2010. There were a number of one-off transactions relating to voluntary retirement schemes and a provision for pensions, which amounted to €5.2 million.
The company said that a tough competitive environment and extensive regulation substantially impacted the group’s mobile business.
But revenue reduction from mobile business and slow and steady decline in traditional fixed-line voice services were offset by growth in TV and data services.
Go said it had over half a million customer connections in the domestic market.
Costs amounted to €108.8 million, a marginal reduction of €1.2 million over the previous year.