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GO concerned about pension scheme mandate
By MaltaMedia News
Aug 30, 2008 - 12:19:28 PM
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GO announced that its turnover for the period January to June 2008 amounted to €64.2 million, an increase of 1.6% over the comparative period. This was characterised by the continued decline in traditional fixed-line voice services which is however being mitigated by revenues from broadband, mobile and new business.
The group continues to enjoy a significant client base. During the period under review, the TV client base increased by 24%, that of broadband by 12% whilst that of mobile increased by 1.5%. These positive results compensate for a net decline of 2% in fixed-line connections. The overall client base of the group increased by 1.8% and exceeded 450,000 services.
GO Chairman Sonny Portelli said the period under review is characterised by the negative impact of a judgement by the Court of Appeal on July 7. The Company was mandated to set up a pension scheme effective from January 1, 1975. The scheme applies to employees that Telemalta Corporation had taken over from Cable and Wireless. The Group estimates that the cost to date of past and future benefits payable under the scheme amount to €13.2 million and is therefore recognising an additional provision amounting to €11.8 million.
"The magnitude of the impact of this judgement has dampened what are otherwise very encouraging results," Mr Portelli said.
Profit from operating activities amounted to €1 million. Although this is €11 million below that registered in the same period last year, results include the provision for pensions of €11.8 million and a depreciation charge of €12.9 million (2007: €10.6 million). The Group's earnings before interest, tax, depreciation and amortisation (EBITDA) before the provision for pensions amounted to €25.7 million and shows an increase of 13% over the same period last year.
During this period, GO plc and its parent company, Emirates International Telecommunications Ltd, each acquired 50% shareholding in Forgendo Limited. These participated in the acquisition of a significant shareholding in Forthnet SA. During the period under review, the Group however recognised a loss of €2.7 million representing its share of results of Forgendo Limited.
The group also plans to launch WiMax later this year.
Regulation continues to impact the Group negatively. Last year the Group's mobile arm experienced regulation of roaming which severely impacted its wholesale business. This year, regulations have impacted the Group's fixed-line business unit through the regulation of the provision of certain data services. The current year will be the first year when the full impact of roaming regulation will be felt. The full impact of regulation of data services will be felt next year.
The Board of Directors has resolved to determine the extent of dividend distribution for 2008 on the basis of the full results for the year. Accordingly no dividends are declared upon the issue of the results for the six-month period ended 30 June 2008.
© Copyright 2008 by MaltaMedia.com
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Latest update:
Aug 31, 2008 - 5:01:07 PM CET
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