Go plc on Thursday announced profits of €1 million for the first half of this year, €11 million below the profits registered in the corresponding period last year.
The company said the result was attributable to an €11.8 million provision for pensions and a depreciation charge of €12.9 million (2007: €10.6 million). The group's earnings before interest, tax, depreciation and amortisation before the provision for pensions amounted to €25.7 million, an increase of 13 per cent over the same period last year.
Group turnover amounted to €64.2 million, an increase of 1.6 per cent. Traditional fixed-line voice services have seen a net decline of two per cent which is being mitigated by revenues from broadband, mobile and new business, which includes also TV.
Go said the group's overall client base increased by 1.8 per cent: users of TV services by 24 per cent, of broadband services by 12 per cent and of mobile services by 1.5 per cent.
A Court of Appeal judgement on July 7 mandated the company to set up a pension scheme effective January 1, 1975. The scheme applies to employees that Telemalta Corporation had taken over from Cable and Wireless. Go plc is the successor in title to Telemalta Corporation. The group estimates that the cost to date of past and future benefits payable under the scheme amount to €13.2 million.
An additional provision of €11.8 million has been recognised. Meanwhile, Go is to examine the financial, technical and legal interpretation and implementation of the judgment further.
Go and its parent company, Emirates International Telecommunications Ltd, each acquired 50 per cent shareholding in Forgendo Ltd. As at end June, Forgendo Ltd had acquired a 23.71 per cent shareholding in Forthnet SA, which was increased to 33.89 per cent in August. Forthnet SA is a maturing company and a major fixed-line and broadband service provider in Greece. Forthnet SA is also in the process of completing the acquisition of Greece's only satellite TV service provider. Go recognised a loss of €2.7 million representing its share of results of Forgendo Ltd.
Go's decision to invest in its second submarine cable has been vindicated by the recent incident in Sicily that resulted in a disruption of service. Through the investment, from next year only its clients in Malta will enjoy a fully redundant international connectivity. Go's 3G network has seen encouraging growth rates for wireless broadband. Investment in broadband services will continue through its 1.5km project and plans also to launch Wimax later this year.
Net cash generated from operating activities amounted to €27 million and was in line with that registered last year.
Chief executive officer David Kay said that loss of subscribers for traditional voice services is significantly below expectations, while growth continues in all other sectors. He said TV and broadband are the main growth areas. In the last six months, the group completed its exit from the international call centre business to concentrate its efforts on services directly related to or complimentary to the telecommunications sector. Group revenue increased by 1.6 per cent.