Malta's Go Reports Loss on One-Off Costs
Published on: 3rd Sep 2009
Note -- this news article is more than a year old.
Maltese telecoms operator, Go has reported a 4.8% drop in its first half revenues compared to last year, to EUR61.12 million. 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.
The operating results for the period show a loss of EUR1.14 million compared to a profit of EUR1.04 million a year ago, after accounting for various significant one-off items including voluntary retirement costs amounting to EUR7.26 million. After eliminating the effects of these one-off items, the operating activities for the current period have returned a profit of EUR6.89 million - which is still down sharply on the EUR 13.15 million a year ago.
The company said that three key 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.
Revenue from fixed line voice services declined by EUR3 million representing a decline of 12%. Local regulations, which became effective half way through in 2008, have adversely affected data services revenue, which declined by 6%, while mobile services declined by 3% driven by lower consumer spending, increased competition and aggressive retention offers.
The Group's earnings before interest, tax, depreciation and amortisation (EBITDA) and after eliminating significant one-off items amounted to EUR18.61 million, a decrease of 28.5% over the comparative period.
After providing for net finance expense amounting to EUR0.71 million and the Group's share of the results of investment in Forgendo amounting to EUR3.73 million, the Group's loss before taxation amounted to EUR5.37 million, compared to a loss of EUR1.42 million in the comparative period to 30 June 2008. The net loss after tax amounted to EUR5.43 million compared to a net loss of EUR4.40 million for the six month period to 30 June 2008.
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% 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.