1 September 2010: GO p.l.c. - Malta’s leading communications and entertainment provider - announced the results for the first six months of 2010. During this period, GO’s revenue amounted to €64.19 million, as against €59.89 million in 2009. This represents a growth of 7.2%. In addition, during the first six months of the current financial year GO achieved a normalised operating profit of €11.35 million, a 46% increase over a normalised operating profit of €7.77 million registered in the same period last year.
The strong improvement in the operating performance of the Group is due to both improved revenues as well as lower costs. Details of these results were given by GO’s Chairman Deepak Padmanabhan, CEO David Kay and CFO Edmond Brincat during a briefing session for the media, stockbrokers and financial intermediaries.
GO Group experienced strong growth in broadband, data and tv services which have compensated for the decline the Group continues to experience in traditional fixed-voice services, though it is encouraging to note that the rate of decline is slowing down. Developments in the mobile market during the second half of 2009 have lead to a marginal decline in revenue from mobile operations in spite of growth in the subscriber base. Revenue from the BM companies in which the Group acquired 60% in April last year, amounted to €4.89 million and represents a key growth area for the Group.
Cost of sales amounted to €38.06 million and although they represent growth of 5.1% over the €36.20 million registered in 2009, the increase is directly related to the revenue generated by the BM companies. GO p.l.c. managed to significantly reduce its cost of sales and administrative expenses with the main reductions coming from payroll and various discretionary cost items. The reduction in costs was mitigated by increased electricity expense and costs directly related to increased sales activity, primarily tv.
The Group’s earnings before interest, tax, depreciation and amortisation (EBITDA) and before significant one-off items amounted to €23.13 million as against €19.86 million in the comparative period, an increase of 16.5%.
After providing for net finance costs amounting to €1.27 million and GO Group’s share of the results of the investment in Forgendo Limited amounting to €7.03 million, as well as the adjustment to the carrying amount of the investment in Forgendo following the capitalization of interest free loan, the Group’s loss before taxation related to Forthnet SA amounted to €0.65 million, compared to a restated loss of €4.49 million in the comparative period. The net loss after tax amounted to €5.22 million compared to a net loss of €4.86 million for the six month period to 30 June 2009.
The Group continued to generate free cash flows from its operations, which funds were utilised to finance the Group’s various investments, in particular those aimed at strengthening the Group’s various wire line and wireless networks.
Commenting about these results, GO Chairman Deepak Padmanabhan said: “The results for the first six months of this year are very positive. In terms of all numbers, both customers and revenues, we are ahead of 2009 and also ahead of 2010 projections. Clearly we need to stay focused and ensure our growth continues as we reap the benefits of reduced costs, mainly related to headcount, and increased sales activity across all services.”
GO’s Chairman spoke also about the investments the company is making across all its networks infrastructure: “Recently, we announced that GO is actively pursuing investments in its networks of some €100 million over the next six years and will see us deploy Fibre-to-the-home, mobile network upgrades, as well as investments in our tv infrastructure to cover new services and applications. All this is being done so that our customers continue getting the best level of service backed with the latest technology. We want to continue leading the local market and offer the best to our customers.”
GO’s CEO David Kay spoke about GO’s latest addition to its portfolio of services – tv. He said: “The acquisition of exclusive premium content of the English Premier League and the Italian Serie A, and the recent launch of our movie and series channel GO stars, has boosted our already popular tv offering. Such content will help us reaffirm our position as the leading communications and entertainment provider in Malta.”
Speaking about the key developments that contributed to these results, Mr Kay said that over the past years GO has focused its efforts in ensuring that it provides its customers with an unparalleled customer experience. This strategy is delivering results as the Group continues to register strong performance in customer retention and acquisition across all its products. This result is also due to the continued success of GO’s bundling via packages like Home Pack.
“During the period under review customer connections are fast approaching the 500,000 milestone as a result of growth in broadband, tv and mobile connections coupled with strong retention of traditional fixed-voice connections. As a result of strong growth throughout the first half of the year, as at 30 June the tv client base exceeded 52,000 whilst broadband connections are fast approaching 60,000. GO is confident that it can further reinforce its leading position in the market as it launches various premium tv products during the second half of the year,” Mr Kay said.
He added that during the second half of 2009 the Group managed a significant reduction in its headcount levels: “Reductions are ongoing, albeit at a slower rate. These reductions, coupled with major reviews of the way the Group conducts its business, are delivering significant reductions in costs. The Group will continue to pursue such initiatives on an ongoing basis to reflect changes in the market.”
GO’s success in retaining and growing its customer base, the launch of new products and the benefits resulting from right-sizing and reorganising the Group gives it a solid basis on which to compete effectively.
During the GO financial presentation for the first six months of 2010 (from left):GO’s CEO David Kay, Chairman Deepak Padmanabhan and Chief Financial Officer, Edmond Brincat.