Noel Grima

On Tuesday GO held its seventeenth Annual General Meeting during which the company's senior management team provided shareholders with a detailed review of the positive performance achieved by GO during 2014. The meeting also approved all resolutions presented and approved a dividend of €0.07 per share.

Opening the meeting, GO Chairman, Deepak Padmanabhan said, "Our performance has been impressive, with profit before tax increasing 30 per cent to €20.3 million. As a result, we have an even stronger balance sheet, healthy cash flows and a more resilient brand. How are we achieving all this? Two main strategic thrusts continue to drive this business forward. Firstly, we are transforming our core telecommunications business. Secondly, we are pursuing a number of initiatives which allow us to focus on  areas with growth potential."

GO's CEO Yiannos Michaelides also updated shareholders with a detailed review of GO's operations and the results achieved. These show that operating profit increased by 21.0% to €21.8 million while normalised operating group profit for the year amounted to €24.4 million, an encouraging increase of over 17%.

Group revenues in 2014 remained stable at €122.3 million, thanks to growth in retail activities which compensated for the decline in revenues from fixed voice and wholesale activities, which occurred as a direct result of regulatory intervention.

Normalised EBITDA increased to €49.2 million in 2014, and cash generation from operations amounted to €48.8 million, an increase of €1.7 million over 2013.

"This strong performance clearly demonstrates GO's ability to out-perform the sector, and is in stark contrast to the challenged profitability levels being registered by many European operators," said Mr Michaelides, who also discussed a number of factors which have contributed to this success.

These include investment in infrastructure where a number of exciting developments in wi-fi, 4G, and particularly fibre are under way; TV content particularly premium sports; product development particularly bundles, IPTV and TV Anywhere; customer service; and human resources.

GO's CFO Edmond Brincat also briefed shareholders on the group's financial performance and provided an update on GO's investment through Forgendo Limited in the Greek operator Forthnet , and in the more recent investment, Cyprus-based cable operator Cablenet.

He said the results show that the company's diversification strategy has worked. Although there has been a slight decrease in revenue from the telecom sector, this was caused by regulatory pressures both in Malta and in the EU.

Payroll costs have been stable as the number of employees has decreased from 1345 in December 2009 to 860 last December.

The company has been advised to keep its debts stable at €41 million and to invest more from its large liquidity.

Cablenet is a young company with very good results over the past year and has been attracting more clients, most of which chose the company's triple service.

Forthnet on the other hand continued to be affected by the situation in Greece and now services 20% of Greek homes.

Shareholders were also updated about efforts, now in an advanced stage, to unencumber and develop the 11 main  properties in the group's portfolio which portfolio is  valued at some €50 million.

The company's strategy is to secure its title to these properties, combine administrative services and impose a more efficient use through more centralisation.

The new smaller exchange being built in Sliema will replace the old one by 2016, and the new St Paul's Bay exchange will come on stream in 2017.  The Zejtun exchange will become the company's technology hub. As regards the Marsa (Spencer Hill) and the Birkirkara exchanges, the group is awaiting the Mepa processing of applications to change these to business centres offering quality office space to third parties.

Replying to questions from the floor, the chairman said tghat from company announcements made in Greece, Forthnet had said it had been approached to sell by companies including Vodafone. Forthnet is still evaluating the offers. GO, through Forgendo, has staked its claim to be considered if a sale is made.

The company was criticised because other competitors have been offering 4G earlier but the CEO replied the company now offers what others are offering.

Court cases in France

Former CEO Stephen Muscat claimed two cases have been lodged against GO in France and one has already been concluded and the company fined €100,000 per day unless it conforms to the sentence. The company was also ordered to pay legal costs.

Dr Francis Galea Salomone, company secretary, provided the context of these two cases. The company's data centre offers services both to Maltese and to expatriates, including French persons. One online gaming company relocated to Malta from France and the French government instituted the case against GO.

The first case was heard in a French court in May and notification about this hearing arrived in Malta four days after the date of the hearing. Notification of the second case reached Malta in November.

GO retains its French client was right to offer online gaming from Malta even to French clients. Its legal advisers tell it that it is in the right but this is a court case and teh result can go either way.

An interesting point arose towards the end of the AGM when a shareholder asked why is the company not taking up the opportunities to cover its exchanges with PV panels. He was told the company prefers to invest in core technology.

Mr Padmanabhan stated: "For you as investors in GO, the combined effect of our two-pronged strategy means that your company is stronger, more valuable, and better able to take the decisions required to make GO's future prospects even more exciting. It is a future we can, most certainly, all look forward to,"

The AGM elected the board of directors for the next financial year. There would have been an election for directors but Dr Cory Greenland dropped out of the race, thus enabling the AGM to end without an election.

The AGM also approved various resolutions which included the approval of the financial results for the year ended 31^st December 2014 and the payment of a net dividend of €0.07 per share (net of taxation).