The Malta Independent 15 July 2020, Wednesday

Financial results 2015: GO reports €34.2 million pre-tax profit

Thursday, 11 February 2016, 18:21 Last update: about 5 years ago

GO p.l.c. today published its financial results for 2015, showing a profit before tax of €34.2 million as the group continues to register a strong performance in its core operations. The group's operating profit amounted to €27.8 million, up from €21.8 million in 2014, an increase of 27.9%. A dividend of €0.10 net of tax is being recommended.

GO continued to grow its customer base in 2015, and services well in excess of 500,000 customer connections, which is, by far, the largest customer base of any operator in Malta. GO continues to connect more clients to its mobile, broadband and TV networks, and this growth more than compensates for the marginal reduction in fixed-voice connections. Equally encouraging is the sustained growth in bundled service as the company's Homepack and Duopack product lines retain their customer appeal.   The group also continues to do well in its data centre business and registered encouraging growth in a number of cloud-based services aimed primarily at businesses. As a result, GO delivered robust levels of revenues, profitability and cash generation from its core operations. 

The group generated revenue of €123.7 million, an increase of 1.2% over the comparative year as it continues to achieve growth in retail activities within the context of a fiercely competitive market and constantly evolving customer expectations. This growth more than compensated for the decline in wholesale activity experienced as a result of continued, and disproportionate, regulation at both local and EU level.

GO CEO, Yiannos Michaelides, said, "In December 2015, GO launched Malta's only fibre-powered 4G network and throughout the year GO continued with the rollout of its game-changing Fibre-to-the-Home (FTTH) network. Growth in retail revenue and loyalty from our customers encourage GO to continue to pursue its strategic investments programme to upgrade its networks and launch new technologies. We expect GO's fibre-powered 4G network to achieve nationwide coverage by the summer and will also continue to extend the reach of our FTTH network as fibre is rolled out in more towns and villages, part of an extensive, multi-year, investment programme. All these investments, as well as other initiatives to modernise our core infrastructure, will ensure that GO customers continue to enjoy the best possible fixed-line and mobile broadband experience through a multitude of devices seamlessly across both fixed and mobile networks."

As was the case in 2014, during 2015 group performance was impacted by items of unusual nature, size or incidence relating to voluntary retirement schemes and provisions for pension obligations. Excluding these items, cost of sales and administrative costs declined by 2.8% to €96.3 million (2014: €99.1 million) as the group maintained its focus on managing costs without compromising the customer experience. On a normalised basis, group EBITDA amounted to €52.8 million (2014: €49.2 million) an increase of 7.3% over the prior year. Normalised operating profit improved from €24.4 million in 2014 to €29.0 in 2015, representing growth of 19%.

The year's results were positively influenced by an upward revaluation of €7.0 million of GO's options to acquire control of Cablenet in Cyprus. The improved valuations are the result of continued growth in the performance of Cablenet and improved macroeconomic environment in Cyprus. On the other hand, because of the prevailing economic and political environment in Greece, Forgendo could not complete the sale of its shareholding in Forthnet. As a result, the carrying amount of GO's equity investment in this joint venture could no longer be classified as held for sale in the consolidated financial statements and has been restated to nil, in accordance with the requirements of equity accounting.

Profit before tax amounted to €34.2 million as against €13.7 million (restated) the previous year, whilst earnings per share amounted to €0.261 as against €0.079 (restated) in 2014. Net cash generation from operations remains strong and although at €36.8 million it represents a decrease of €3.6 million over 2014, this decrease is substantially due to the spin-off process.

During the year, GO successfully completed the spin-off of Malta Properties Company p.l.c. through a special dividend of €33.6 million. In spite of this significant dividend GO remains adequately funded with shareholders' funds amounting to €92.1 million and a low level of leverage as GO continues to enjoy a strong balance sheet with reducing level of net debt. This strong financial position ensures that GO retains the ability to continue to fund its investment programme and pay dividends.

GO p.l.c. Chairman Deepak Padmanabhan said, "2015 has been an excellent year for GO and its shareholders. Profitability continues to increase based on a proven programme that is delivering growth in retail revenue and control over costs driven by improved efficiency. Our focused strategy of investing in our networks to give our customers seamless services across wired and wireless networks continues to bear fruit. Such achievements are, in no small part, the result of the ongoing efforts of all our employees across the group; they have clearly understood our strategy and are dedicated to implementing it with creativity and innovation. Furthermore, the recent investment in Kinetix IT Solutions Limited will provide opportunity to further grow the group's business to business propositions. GO has also earlier this year exercised its options and gained majority control of Cablenet Communication Systems Limited, the Cypriot-based broadband and TV company. This will provide GO with growth opportunities in a market which is twice the size of its domestic market in Malta. As a result, the Board of Directors is recommending that shareholders approve the payment of a net dividend of €0.10 per share during the forthcoming Annual General Meeting."

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