GO plc - Interim Results

On 7 August 2020, GO plc published its condensed interim financial statements covering the six-month period ended 30 June 2020.

Performance Overview

During the first six months of 2020, revenues increased by 7.8% to a record (at interim stage) of €91.6 million compared to €84.9 million in the previous comparable period. Most of the increase in business activity was generated by Cablenet Communication Systems plc – GO’s telecoms subsidiary in Cyprus – which recorded a near 32% growth in revenues to €23.2 million (H1 2019: €17.6 million) largely on the back of the company’s higher penetration into the Cypriot market including in the premium sports segment. Furthermore, GO’s data centre subsidiary – BMIT Technologies plc – posted a near 5% increase in revenues to €11.7 million whilst GO’s other operations in Malta also recorded an increase of 1.4% in revenues to €58.1 million (H1 2019: €57.3 million). The latter was mainly due to the launch of the new ‘GO Easy Buy’ product, consolidation of traditional fixed line services as well as sale of hardware. On the other hand, GO’s operations in Malta were negatively impacted by the reduction in mobile roaming revenue which was directly dented by the measures taken by the Government as response to the COVID-19 situation.

On the expenditure side, operating costs surged by 15% to €81.1 million (H1 2019: €70.6 million) reflecting higher depreciation and amortisation charges (+€3.77 million) as well as various initiatives that GO embarked on in response to COVID-19. Excluding depreciation and amortisation charges, EBITDA eased slightly lower to €35.5 million compared to €35.7 million recorded in H1 2019 whilst the EBITDA margin fell to 38.8% (H1 2019: 42%). Meanwhile, net finance costs remained virtually unchanged at €1.45 million as GO maintained a stable level of indebtedness which amounted to €126.6 million (including lease liabilities of €47.8 million) as at 30 June 2020 compared to the same period in 2019.

Overall, GO reported a pre-tax profit of €8.97 million which is 30.6% lower than the corresponding figure of €12.9 million recorded in the first half of 2019. After taking into account tax charges of €3.33 million and minority interests of €0.6 million (pertaining to the shareholdings in Cablenet and BMIT not owned by GO), the company’s net profits attributable to shareholders amounted to €5.04 million (H1 2019: €6.39 million). This translates into an annualised return on average equity of 9.3% (H1 2019: 12.4%).

The condensed Statement of Financial Position as at 30 June 2020, when compared to the corresponding figures as at 31 December 2019, shows that GO’s net assets increased by 4.5% to €115.4 million. Total assets stayed at €327.7 million whilst total liabilities contracted by 1.7% to €198.7 million largely reflecting the significant decline amounting to €10.9 million in trade and other payables to €63.8 million (31 December 2019: €74.8 million).

Outlook

In their commentary, the Directors of GO explained that the company commenced preparations for the COVID-19 pandemic well before the first wave of infections hit Malta. Throughout the pandemic, GO adopted a proactive approach in extending its services across the country and also extend its support to multiple businesses and customers. Furthermore, GO took various measures aimed at mitigating the short-term financial impact of COVID-19 while ensuring the long-term sustainability of its business.

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GO plc – Condensed Interim Financial Statements for the six-month period ended 30 June 2020.