GO announced the financial results for the first six months of this year. Group turnover amounted to €61.12 million, reflecting a decrease of 4.8 per cent over the comparative period last year. The decrease in revenue has occurred in spite of an overall increase in the group’s customers’ connections and services, which now total 469,000.

These results are a reflection of three important factors that have impacted GO’s revenues, namely the overall economic slowdown, the increasing competitive environment and ensuing lowering of rates and issuing of more attractive GO tariffs and offers in the market, as well as the effects of regulation on both retail and wholesale rates. Despite these challenges, GO managed to grow its customer base, and is well positioned to face the challenges and continue leading the local communications market. This is thanks to its good, innovative and reliable products and bundling of services, best level customer experience, investment in new technologies, and continued cost reduction programme.

In line with our expectations, revenue from fixed line voice services declined by e3.0 million representing a decline of 12 per cent. Local regulations, which became effective half way through in 2008, have adversely affected data services revenue, which declined by six per cent, while mobile services declined by three per cent driven by lower consumer spending, increased competition and aggressive retention offers.

The operating results for the period show a loss of e1.14 million compared to a profit of e1.04 million achieved in the comparative period, after accounting for various significant one-off items including voluntary retirement costs amounting to e7.26 million (6 months 2008: e0.32 million). After eliminating the effects of these significant one-off items, the operating activities for the current period have returned a profit of e6.89 million (6 months 2008: e13.15 million).

The Group’s earnings before interest, tax, depreciation and amortisation (EBITDA) and after eliminating significant one-off items amounted to e18.61 million, a decrease of 28.5 per cent over the comparative period.

After providing for net finance expense amounting to e0.71 million and the group’s share of the results of investment in Forgendo Limited amounting to e3.73 million, the Group’s loss before taxation amounted to e5.37 million, compared to a loss of e1.42 million in the comparative period to 30 June 2008. The net loss after tax amounted to e5.43 million compared to a net loss of e4.40 million for the six month period to 30 June 2008.

The Group continued to generate free cash flows from its operations, which funds were utilised to acquire a new subsidiary, namely Bell Med Group, acquire additional tangible fixed assets and further investment in Forthnet through the jointly-controlled entity, Forgendo Limited.

In line with the group’s policy to right-size and right-skill its operations through retraining, voluntary retirement schemes and controlled recruitment, the group has accepted to compensate a number of employees to benefit from the early retirement scheme. Based on accepted offers, the Group has provided for an amount of e7.26 million of which e4.80 million were actually paid as at 30 June 2009. The group’s headcount amounted to 1,262 as at 30 June 2009 compared to 1,413 as at 31 December 2008. Further headcount reductions will take place in the second half of this year.

Commenting on these results, GO Chairman Sonny Portelli said: “Notwithstanding the reduction in revenue, the Group, through its marketing and promotion efforts, managed to mitigate the potential losses in revenue had such actions not been planned and executed. The overall customer connections across all services of the group continued to grow and as at 30 June 2009 amounted to 469,000 services, an increase of 1.7 per cent over the comparative period.”

Mr Portelli added that whilst the Group experienced a slight decline in mobile subscribers due to the launch of the third mobile operator and MVNOs, the group experienced growth in its TV and broadband Internet client base. However, EU and local regulations have contributed to lower wholesale and retail revenues thus depressing further the group’s turnover, hence the group’s strategy to invest in new ventures both locally and overseas.

GO Chief Executive Officer David Kay said: “The group is moving ahead with its strategy to continue building on its significant advantage in providing excellent customer experience, backed by its own valid human resources, reliable technologies and innovative services and products. We believe that investing in the constant improvement in our customer experience by training our people and improving our systems are key to continue leading the market. The group’s success in retaining and growing its customer base and the anticipated benefits of right-sizing and reorganising the group auger well for improved results in the coming years particularly as the current economic trends improve.”

Mr Kay added: “The bundling of services into one package under the brand Home Pack has proven to be successful and we will continue pursuing such bundling of services in the coming months. We are confident that we have in place the right elements to continue succeeding.”

The Board of Directors has resolved to determine the extent of dividend distribution for 2009 on the basis of the full results for the year. Accordingly, no dividends are declared upon issue of the results for the six-month period ended 30 June 2009.