From Ms G. Pace

I refer to the article entitled “Maltacom reports on a difficult year while Central Bank raises interest rate”.(TMIS, 10 April) Essentially, the part referring to Maltacom dealt with the 42 per cent decline in the group’s pre-tax profits for the period ended 31 December 2004 without, in any way, analysing these results.

The article in question dwelt very little on the Maltacom results and gave an unfair interpretation of these results due to the fact that important factors impacting the results for financial years 2003 and 2004 were completely omitted.

To put matters in the right perspective it has to be stated that, notwithstanding fierce competition (especially in international telephony and the mobile sector), the Group has still managed to retain, almost, its market share of 2003 with turnover going down only slightly by just about 0.9 per cent when comparing the two years in question. Of more relevance are the ‘one off’ items of 2003 and 2004 that have impacted the performance of the Group, of which no mention whatsoever was made in the article in question. A cursory glance at the Preliminary Statement of Group Results and State of Affairs (Page 1) would have revealed that last year’s exceptionally high profits were to a great extent attributable to the sale of investments by the Group (notably the company’s investment in Vodafone Malta Limited). Total sales of investments in 2003 realised a ‘non-recurring’ profit of Lm 10,437,000. Although it is correct to state that pre-tax profits went down by 42 per cent in 2004, making such a statement without qualifying it is inconsistent with a faithful interpretation of the results.

We shall have the opportunity to demonstrate in our presentation to the analysts on 19 April 2005, that if one were to exclude ‘non-recurring’ transactions of 2003 and 2004, the operational performance of the two years in question would be very much comparable. In fact operational performance of 2004 would be somewhat higher than 2003. There is ample data in the Preliminary Statement of Group Results and State of Affairs (Page 1) that should have alerted the writer to analyse the results in slightly more detail and not refer solely to the Group’s decline in pre-tax profits.

Grace Pace

Public Relations Executive

Maltacom plc