GO plc - Interim Results

During the first six months of 2004, Group turnover remained practically unchanged over last year at Lm27 million. Revenue from fixed line continued to decrease due to the pressures from VOIP technology and the continuing migration to mobile telephony. However, this was compensated for by increases in turnover registered by Go Mobile and the other subsidiaries, mainly Datastream. Cost of sales increased by 7.7% to Lm15 million, mainly as a result of a one-off item of expenditure at Company level and other costs as subsidiary level necessary to retain their market share in an increasingly competitive environment. The Group gross margin dropped by 8.8% to Lm11.9 million, resulting in a margin of 44.3% from 48.4% in June 2003.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) – a very important measure in the telecommunications industry due to the high depreciation charges – amounted to Lm11.4 million compared to Lm12.2 million in the first six months of last year. This translates into an EBITDA margin of 42.2% (2003: 45.2%), still a very good margin when compared to foreign telecoms operators.

Administrative and distribution expenses increased marginally by 1.9% to Lm5.2 million. Group operating profit before exceptional items amounted to Lm6.6 million compared to Lm7.7 million in 2003. However from the 2003 figure one must deduct an amount of Lm720,000 which relates to the compromise agreement with Vodafone Malta Ltd. last year to settle some long outstanding disputes. As such, Group operating profit before exceptional items dropped by Lm432,000 over last year.

The exceptional item of Lm2.3 million last year relates to VAT in dispute. This amount had been paid under protest by the end of December 2003. The dispute is, however still ongoing with the VAT Appeals Board.

The Group’s profit before tax for the first six months of the year increased by 25.4% to Lm6.2 million. After accounting for taxation, profit for the period under review amounted to Lm4.1 million compared to Lm3.3 million in the same six months of last year. The Group’s earnings per share taking account of last year’s exceptional items increased by 25% to 4c0 per share. Excluding the exceptional items Group earnings per share dropped from 5c4 to 4c0.

Total assets as at the end of June 2004 stood at Lm125.3 million with shareholders' funds at Lm76.8 million, resulting in a book value per share of 75.8 cents. Maltacom's net debt continued to decrease and at the end of June amounted to Lm11.8 million compared to Lm24.6 million in June 2003. The gearing ratio therefore dropped from 36.1% in June 2003 to 15.4%.