Go plc’s bottom line has continued to worsen as the telecoms group registered a €9.1 million pre-tax loss for the year ending December 31, 2010, almost three times the €3.2 million loss recorded in 2009.
The loss comes despite a tripled operating profit of €22.8 million and customer connections growing by eight per cent to hit 515,000, surpassing the declared half-million milestone Go was seeking to achieve.
Go’s investment in Greek telecoms company Forthnet, through the Forgendo joint vehicle with its majority shareholder, negatively impacted the balance sheet by €28.3 million. Forthnet’s performance last year suffered in its home market’s economic environment and its business’ growth failed to mitigate reduced profitability of its TV business.
“Both Forthnet and Forgendo recognised impairment losses on the value of their investment as this has been re-valued to reflect the current Greek economic environment and its impact on the company’s outlook,” Go said. Over the past months, Forgendo has continued to increase its stake in Forthnet so that its holding at the end of last year stood at 40.99 per cent.
Go’s normalised operating profit for 2010 amounted to €23.1 million as against the €18.6 million in 2009; Normalised earnings before interest, tax, depreciation and amortisation increased by €6.6 million to €49.1 million.
Turnover grew by seven per cent to €132.3 million as revenue from broadband and digital TV services grew to offset the reduction in fixed-line services demand. Mobile voice and data services revenue remained stable.
Go said control over expenditure remained a priority and outlined 2010 savings in employee benefit expenses amounting to €3.6 million, down 11.9 per cent from 2009.
Headcount stood at an average 1,053 full-time equivalents, a reduction of 21.7 per cent from 2009 staff levels.
“The increased costs are invariably directly related to increased activity, primarily driven by TV operations or as a direct consequence of more intense competition which is leading to increased subscriber acquisition and retention costs. During 2010 the group was also impacted by the significant increase in electricity rates which led to an increased cost of utilities of more than €1.2 million,” Go added.
Operations generated €43.2 million in cash – up from €18.4 million in 2009 – enough to fund group investments, dividend payouts, and post an improved cash position for 2010.
The board is recommending the payment of a final dividend of €0.05 net of tax per share for shareholders’ approval at the annual general meeting on June 8.
The dividend will be payable on June 11 to shareholders on the register as at May 9.