GO reports robust results, with €28.1 million pre-tax profit

GO last week published its financial results for 2016, showing a profit before tax of €28.1 million.

The Group’s robust performance was underpinned by significant year on year increases in revenues, which grew by €33.3 million to €157.0 million, and in Group Earnings before Interest, Tax, Depreciation and Amortisation which grew by €10 million to €61.6 million, an increase of 19.4 per cent. A dividend of €0.11 net of tax is being recommended.

GO CEO, Yiannos Michaelides, said, “2016 was an encouraging and successful year for GO, as we reap the benefits of our customer focused long term strategy and leverage competitive advantage from one area of the business to another. GO Group is now a larger, more diversified, and more international business. The fact that we have delivered another very satisfactory year is obviously encouraging and we are now also in a position to look ahead at greater growth potential.

‘The acquisition of a controlling interest in Cablenet, based in Cyprus, was a major milestone because, whilst consolidating our position as the leading telecommunications service provider in Malta, the Group now also has a significant presence in another market, which is double the size of Malta.

‘During the year the Group also acquired a controlling interest in ICT solutions company Kinetix, helping GO to move closer to achieving its ambition to become a 360 degree ICT powerhouse in Malta. These factors, combined with the continuing strong operational performance of the rest of the Group and our continuing invest- ments in Malta’s communications infrastructure, particularly Fibreto-the-Home, mean that GO is very well placed to look to the future with optimism’’.

The increases in revenue and EBITDA were largely due to the fact that 2016 is the first full year in which GO is consolidating revenue generated by Cablenet. This represents €29.1 million of the growth in Group revenue.

Revenue generated in Malta also increased, growing by 3.4 per cent to €127.9 million. This was the result of the Group consolidating new revenue streams, following the acquisition of a controlling interest in its new ICT services subsidiary Kinetix, and 1.9 per cent growth in GO’s retail and wholesale activities.

Although retail revenue from legacy fixed voice services continued to decline, GO experienced growth in all other retail sectors, particularly mobile and cloud-based services.

Furthermore, the continuing investment in Fibre-to-the-Home, which now covers more than 40,000 households, contributed to growth in GO’s broadband client base and was also a main contributor to growth in retail revenues in 2016.

GO maintains a focus on managing costs, without diluting or compromising the customer experience. Cost of sales, administrative and related costs amounted to €131.9 million (2015: €97.5 million). The main increase of €29.7 million is the result of the consolidation of the operations of Cablenet, Kinetix and amortisation charges on intangible assets arising from the acquisition of these subsidiaries.

Operating profit amounting to €26.3 million (2015: €27.8 million) represents underlying growth in operating performance of the Group if one takes into consideration the impact of amortisation of intangible assets created upon the acquisition of Cablenet and Kinetix.

Profit before tax amounted to €28.1 million (2015: €34.2 million).

Cash generated from operations amounted to €63.8 million, an increase of €27.0 million over 2015, as a result of improved cash generation from Malta operations as well as the consolidation of Cablenet.

GO Chairman, Nizar Bouguila, said, “It is abundantly clear that GO’s underlying performance in both Malta and Cyprus in 2016 was strong, more so when taking into account the regulatory and competitive pressures present in both markets. These results are testament to the forward looking strategy which the Group’s executive management team has developed and implemented over recent years, and whose ultimate objective is to deliver an unparallel and seamless telecommunications experience across fixed and mobile networks. GO will continue to pursue its stated objectives of providing the very best in communications, IT and entertainment services to customers, and to being Malta’s leading integrated telecommunications services provider. In pursuit of this, GO will maintain its investments in 4G and accelerate the rollout of Fibre-to-the-Home. Cablenet will also continue with its investment programme which is focused on extending the reach of its network, allowing a greater number of customers access the best possible broadband experience in the Cypriot market.”