GO plc - Interim Results

On 31 August, GO plc published its half-year results covering the first six months of 2012. During this period, GO generated €63.6 million in revenue representing a 2.4% drop due to intense competition across all product lines of the Group and lower mobile termination rates as mandated by the Malta Communications Authority (MCA). The Directors also explained that the Group retains a strong client base mainly through bundled services. Furthermore, the Group registered further growth in subscribers for TV services.

Meanwhile, cost of sales increased by 3.2% to €39.4 million due to higher costs directly related to sales as well as exceptional costs related to the migration of the Group’s mobile network onto new state of the art technology. As a result, gross profit dropped by 10.3% to €24.3 million.

Administrative and distribution expenses dropped by 6.2% to €14.2 million after the Group pursued cost reductions in various areas and continued to reduce its headcount which is now just above 900 employees.

Earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to €24.5 million representing a 6.3% drop from the previous comparable period. After accounting for depreciation and amortisation of €13.97 million (H1 2011: €13.77 million), the Group’s operating profit before one-off items amounted to €10.5 million compared to €12.4 million in the first half of 2011.

The income statement of GO was impacted by a further €0.72 million in provisions for pensions and voluntary retirements costs compared to €3.1 million incurred in the previous comparable period. On the other hand, GO benefitted from a €1.6 million reversal of a provision on a long outstanding receivable not related to the Group’s trading activities which was recovered during the period under review. As a result, GO’s operating profit amounted to €11.4 million representing a 23.1% rise over the comparable figure of the first half of 2011.

Net interest expenses dropped by 9.7% to just over €1 million due to the increase in interest receivable to €0.3 million.

Based on the share price of Forthnet, Forgendo’s investment in the Greek telecoms company has been valued at €6.2 million with GO’s 50% shareholding in Forgendo therefore being valued at €3.1 million giving rise to a further €0.6 million impairment on the Group’s loans receivable from the joint-venture. This is substantially lower than the €22.2 million impairment incurred on the same investment during the first six months of 2011. However, it is important to note that comparative figures were based on a different valuation method which was changed as from 1 January 2012 after the equity investment in Forgendo was completely wiped out by 31 December 2011.

The Income Statement for the six months ended 30 June 2012 was also boosted by the €11.37 million gain arising from the exchange of property between the Group and the Government of Malta. On 10 May, GO sold the land in Qawra (with a carrying value in the accounts of €2.4 million), to the Government of Malta for €13.8 million in exchange for full and proper title on a number of properties required by the Group for its core operations, which were given the same value as the land in Qawra.

Overall, the GO Group registered a pre-tax profit of €20.4 million compared to the loss of €14.1 million in the first six months of 2011. After accounting for a tax charge of €5.1 million, the Group’s profit after tax amounted to €15.3 million representing a significant turnaround from the net loss of €17.8 million in the first six months of 2011.

The balance sheet as at 30 June 2012 shows total assets of €227.9 million – an increase of 6% since 31 December 2011 mainly due to the increase in property value related to the exchange of properties as well as a 68.3% increase in the cash balance to €15.65 million. The improved cash balance also led to a drop in net debt to €55.66 million. Compared to shareholders funds of €99.4 million (up 19.3% from the 2011 year-end figure), the GO Group’s gearing ratio is 56%. The net asset value per share works out at €0.981.


The Directors did not declare an interim dividend and commented that the extent of a dividend distribution for 2012 will be based on the full-year results.


Download a copy of the GO plc 2012 Half-Year Report