GO plc - Interim Directors’ Statement

On 2 November, GO plc issued its Interim Directors’ statement to update the market on its performance during the third quarter of this year. The Directors noted that the reduction of €1.9 million in normalized operating profit in the first half of the year has narrowed during the three months ended 30 September as the Group’s performance levels improved when compared to the same quarter last year.

However, profits for the first nine months of 2012 are still lower than those registered in the same period last year mainly due to the declining trend in the average revenue per user (ARPU) levels. In this respect, regulation was the main factor which impacted revenues particularly in the mobile telephony sector with regulatory induced reductions in termination rates. On the other hand, GO expects to mitigate some of this lost revenue through growth in mobile services and television. Moreover, as more clients subscribe to bundled products, the Group remains positive about its ability to continue to secure solid revenue performance.

GO maintained its focus on cost optimisation and has benefitted from reduced payroll costs and savings in a number of discretionary expense categories. Nonetheless, the changeover from the legacy mobile infrastructure will result in a one-time significant increase in operational expenses which will impact the Group’s performance for the year.

Despite the dip in profitability, the Group maintains a client base of over 500,000 connections across its product range in spite of the intense competition in the local telecoms market. Through its investments in television and broadband infrastructure, the GO Group has managed to retain its traditional clients in fixed-voice telephony services whilst also attracting clients to its television and broadband services. Furthermore, the Group is also expected to benefit from the new mobile telephony infrastructure through increases in market share and revenues in the future.

GO reported that its financial situation remains strong as it continues to generate healthy cash levels from its on-going operations and holds sufficient cash resources to support its investment programme as well as to honour its commitments.

The announcement also revealed that Forthnet is expected to publish its third quarter results by the end of November. In the meantime, Forthnet is progressing with its plans to increase its capital as it aims to raise €30 million. In this regard, GO’s Directors are still awaiting the publication of the prospectus upon which the Directors will be able to determine whether or not to participate in the rights issue.