GO's Greek subsidiary in Malta to explain €45.2 million loss

During a presentation held in St Julian's, GO plc announced that it registered an operating profit of €18.4 million in 2011, however the telecommunications company reported an overall loss of €45.2 million as events taking place in Greece negatively impacted the value of GO's investment in Forthnet.

Forthnet's CEO,  Panos Papadopoulos was present at the presentation of GO's 2011 financial results and gave details of the company's performance in 2011. He said that the Greek company registered a growth in its customer base and revenues.

Papadopoulos said the Greek company's turnover increased by 1.4% to €415.6 million yet the results were impacted by a €128.5 million goodwill impairment - a non-cash adjustment driven by an increase in the discount rates from 12.1% to 14.8%, due to the Greek macroeconomic environment.

GO Chairman, Deepak Padmanabhan said that "in spite of a challenging economic environment and increased competition, GO managed to keep its turnover stable, with only a marginal decrease from €132.3 million in 2010 to €131.6 million in 2011."

In 2011, the company registered an operating profit of €18.4 million compared to €22.8 million in 2010.

The company's Chief Financial Officer, Edmond Brincat explained that in 2011 there were a number of one-off transactions relating to voluntary retirement schemes which amounted to €2.2 million and a provision for pensions which amounted to €3 million

He added that the normalised operating profit for 2011 amounted to €23.7 million as against €23.1 million in 2010. In regards to the losses registered, Brincat said the company reported a €45.2 million loss before taxation as compared to a €9.1 million loss in 2010.

This loss amounted to €0.503 per share and as a result the Board of Directors of GO decided not to recommend the payment of a dividend.

The company's CEO, David Kay explained that the losses linked to Forthnet, GO's subsidiary in Greece were the result of the economic breakdown in Greece.

Kay said Forthnet's losses have negatively impacted GO's ability to establish the value of its investment in Forthnet through a value in use assessment.  He explained that in the light of this, GO decided that the value assigned to the investment in Forthnet through Forgendo should reflect the share price of Forthnet as quoted on the Athens Stock Exchange. 

This decision led GO to recognise a charge of €62.3 million representing a write down in the value of its shareholding in and amounts receivable from Forgendo as at December 2011 to €3.6 million.

In regards to the telecommunications company's performance in Malta, Kay said GO maintained a strong presence in the local market with over 500,000 customer connections, "in spite of the fierce competition, especially in the mobile sector."

Kay added that GO has made considerable progress in its six-year €100 million investment programme which has seen the company renew its entire mobile network and launch the fibre to home scheme which is currently in trial.

He also explained that apart from launching GO interactive television, the company has also invested in television content such as the English Premier League and the UEFA Champions League rights, making GO the leader in TV premium sports content.