GO plc - Updated Financial Analysis Summary

On 12 May 2023, GO plc published an updated Financial Analysis Summary. The following are the main highlights of the expected financial performance and position of GO (relating to the Group’s telecoms operations in Malta) in 2023:

• Revenues are expected to increase by 3.2% to €133 million principally reflecting higher average revenue per user (ARPU) and further growth in the provision of hardware and equipment complemented by the provision of maintenance and telecom services.
• However, EBITDA is anticipated to drop by 3.1% to €52.5 million as the marked increase in direct costs and administrative expenses to €80.4 million (2022: €74.6 million) is expected to outweigh the increase in revenue. As a result, the EBITDA margin is forecasted to ease to 39.5% from 42.1% in 2022.
• Net finance costs are forecasted to surge by 18.5% to €3.96 million due to higher interest rates on loans impacted by a higher Euribor rate. Meanwhile, depreciation and amortisation charges are expected to remain relatively unchanged at €30.3 million.
• Overall, GO is forecasting a net profit of €14.4 million compared to €15.7 million in 2022.
• The forecasted Statement of Financial Position as at 31 December 2023 shows that total debt is anticipated to rise by 4.1% (or €4.84 million) to €122.6 million, including €37 million in lease liabilities. However, net debt is anticipated to increase by €6.3 million to €117.9 million as cash balances are forecasted to decline to €4.7 million compared to €6.1 million as at the end of 2022.
• The gearing ratio (calculated as total debt divided by total debt plus equity) is anticipated to increase to 52.4% (31 December 2022: 51.4%) whilst the net debt to EBITDA multiple is forecasted to increase to 2.24 times compared to 2.06 times in the 2022 financial year. Furthermore, the interest cover is expected to ease to 13.3 times from 16.2 times in the previous year.