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GO Plc
Quarterly Report • Aug 9, 2024
2053_rns_2024-08-09_05d17660-5056-4cd2-b82f-ea5856da0049.pdf
Quarterly Report
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COMPANY ANNOUNCEMENT
The following is a Company Announcement issued by GO p.l.c. ("the Company") pursuant to the Capital Markets Rules as issued by the Malta Financial Services Authority in accordance with the provisions of the Financial Markets Act (Chapter 345 of the Laws of Malta) as they may be amended from time to time.
Quote
Group Interim Unaudited Financial Statements
In a meeting held earlier today, the Board of Directors of the Company approved the attached Group Interim Unaudited Financial Statements for the six-month period ended 30 June 2024.
The Board of Directors has also authorised the publication of the same Financial Statements which will be available for viewing on the Company's website at: https://prodcms.go.com.mt/wp-content/uploads/2024/08/Interim-Financial-Statements-2024.pdf
The Board of Directors further approved the payment of an interim dividend of €0.05 net of taxation per share. The payment of this Net Dividend amounts to the total sum of €5.1 million.
The interim dividend will be paid on Friday 30 August 2024 to all shareholders who appear on the shareholders' register of Friday 16 August 2024.
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Dr. Francis Galea Salomone LL.D. Company Secretary
9 August 2024
GO plc, Fra Diego Street, Marsa, MRS 1501 Malta PO Box 40, Marsa MRS 1001 t. +356 2124 6200 e. [email protected] Company Registration Number: C22334 VAT Number: MT 12826209
LTRH - Apr 15 – 317
go.com.mt
Condensed Consolidated Interim Financial Statements
For the Period 1 January 2024 to 30 June 2024
Company Registration Number: C 22334
Condensed Consolidated Interim Financial Statements
For the period 1 January 2024 to 30 June 2024
Contents
Pages
| Directors' Report pursuant to Capital Markets Rules 5.75.2 | 1 - 3 |
|---|---|
| Condensed Consolidated Interim Financial Statements: | |
| Condensed Consolidated Interim Statement of Financial Position | 4 - 5 |
| Condensed Consolidated Interim Income Statement | 6 |
| Condensed Consolidated Interim Statement of Comprehensive Income | 7 |
| Condensed Consolidated Interim Statement of Changes in Equity | 8 - 9 |
| Condensed Consolidated Interim Statement of Cash Flows | 10 - 11 |
| Notes to the Condensed Consolidated Interim Financial Statements | 12 - 21 |
| Statement pursuant to Capital Markets Rules 5.75.3 | 22 |
| Independent Auditor's Report on Review of Condensed Consolidated |
Interim Financial Statements
Condensed Consolidated Interim Financial Statements
Statement of financial position As at 30 June 2024
This Half-Yearly Report is being published in terms of Chapter 5 of the Capital Markets Rules issued by the Malta Financial Services Authority and the Prevention of Financial Markets Abuse Act, 2005. The Half-Yearly Report comprises the reviewed (not audited) condensed consolidated interim financial statements for the six months ended 30 June 2024 prepared in accordance with International Financial Reporting Standards adopted for use in the EU for interim financial statements (International Accounting Standard 34, "Interim Financial Reporting"). The condensed consolidated interim financial statements have been reviewed in accordance with the requirements of ISRE 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". The comparative statement of financial position has been extracted from the audited financial statements for the year ended 31 December 2023.
Principal activities
GO p.l.c. (GO) is a publicly listed company on the Malta Stock Exchange and parent company of the GO Group (the Group). The Group has a controlling interest in BMIT Technologies p.l.c.(BMIT), Cablenet Communications Systems p.l.c. (Cablenet), Connectedcare Limited, Cybersift Holdings Limited (Cybersift), GO Ventures Limited (GO Ventures), Sens Innovation Group Limited (SENS), and AQS Med Limited (AQS).
GO is a leading integrated telecommunication services company and the first quad play provider in Malta, offering mobile, fixed line, high-speed broadband, and TV services to more than 500,000 customers. GO also provides unrivalled services to the Maltese business community, including cloud services, roaming services, data networking solutions, business IP services, and managed services.
Review of financial performance
This interim financial report outlines the Group's performance for the first half of 2024. Over the initial six months of 2024, the Group remained committed to its purpose of "driving a digital Malta where no one is left behind". During this period, the Company accelerated the deployment of its FTTH network, successfully connecting over 35,000 new homes, which increased the percentage of homes passed from 78.5% at the end of 2023 to 87%. The FTTH rollout is anticipated to be completed by the end of the financial year 2024.
The Group's continued expansion also extended to the Cypriot market via its subsidiary, Cablenet, which has solidified its standing as the second-largest broadband and TV provider in Cyprus. Furthermore, it is expanding its footprint in the mobile sector, particularly within the post-paid segment, where Cablenet is now recognised as the third-largest mobile operator.
Following the conclusion of the agreement between GO and its subsidiary BMIT regarding the transfer of mobile towers and passive infrastructure at the end of 2023, the first half of 2024 marked BMIT's stewardship of Tower Operations. During this period, BMIT focused on site maintenance and engagement with site owners, emphasising operational integration and seeking new strategies to achieve organisational efficiencies that would benefit the entire Group.
In line with the Group's commitment to values of sustainable energy, the Company acquired 51% shareholding in AQS. AQS is a prominent local alternative energy solutions provider. AQS Med Ltd specialises in providing comprehensive renewable energy solutions for both residential and commercial properties and has established itself as a market leader entrusted with some of the largest installations of PV systems, water and underfloor heating, smart home automation, and EV chargers on the island. This acquisition not only enables the Group to expand within the energy sector but also supports Malta's green initiatives.
Condensed Consolidated Interim Financial Statements
Statement of financial position As at 30 June 2024
Review of financial performance - continued
In the first half of 2024, the Group's revenue reached €113.5 million, reflecting a €6.9 million decrease compared to the same period in 2023. This decline was primarily driven by a €10.2 million, compensated by an increase in recurring service revenues of €3.3 million which resulted in a 2% uplift in the consolidated gross profit margin compared to the same period last year.
On the other hand, despite a highly competitive landscape in the telecommunications segment, both technologically and marketwise, the segment continued to perform in line with the previous year's results at both GO and Cablenet.
At BMIT, revenue from data centre, cloud, and managed services reporting segment remained stable overall when compared to the first half of 2023. However, consistent with recent trends, there has been a noticeable increase in demand for cloud services compared to traditional data centre offerings. This shift has resulted in a 14% increase in revenue from cloud and managed services in 2024. Cloud services generally yield lower profit margins due to their associated costs and pricing structures.
Additionally, the newly acquired subsidiaries, SENS and Cybersift, made a positive contribution to revenue growth, collectively increasing revenue by €0.3 million.
During the first half of 2024, Group cost of sales amounted to €71.4 million (2023: €78.2 million). The decrease of €6.8 million or 9% over 2023 was mainly driven by the drop in hardware sales of mobile devices, telecoms equipment and specialised technical solutions for enterprises. Gross Margin increased to 37.1% (from 35.1% in 2023) and this is in line with the Group's strategy to focus on higher margin revenues.
Administrative and other expenses saw a slight increase of €1.5 million, partially attributable to recordhigh cost-of-living adjustments and one-off payments related to voluntary retirement schemes.
Consolidated EBITDA for the first six months of 2024 amounted to €44.4 million, a slight decrease of €0.6 million or 1.3% compared to the first six months of 2023. Depreciation and amortisation increased by €0.9 million reflecting continued levels of investment in network expansion and other strategic assets across the Group, while net finance costs increased by €0.6 million.
After the 2023 partial exit from Airalo, a GO Ventures investment, the Group sold additional shares in the first half of 2024, realising a profit of €1.7 million in 2024. In total, the partial exit from Airalo yielded a return of €2 million, resulting in a 20x return on investment.
Consolidated profit before tax for the first six months of 2024 amounted to €14.3 million (2023: €15.1 million).
The Group generated net cash flows from operating activities of €33.2 million, a decrease of €0.8 million compared to the first half of 2023. Net cash used in investing activities amounted to €33.9 million (2023: €33 million) including extensive investment in the expansion of fixed and mobile networks in Malta and Cyprus as well as an investment of €1.2 million for the acquisition of a 51% stake in AQS net of funds received from the partial exit of Airalo of €1.7 million. During the period under review, the Group repaid bank loans amounting to €8.6 million and paid dividends amounting to €22.3 million.
As at 30 June 2024, the consolidated total assets stood at €410.8 million representing a decrease of €47.3 million from the position as at 31 December 2023. During this period, the Group continued to invest in crucial areas, including network infrastructure, broadcasting rights and in its transformation towards becoming a fully digital company.
Condensed Consolidated Interim Financial Statements
Statement of financial position As at 30 June 2024
Review of financial performance - continued
During the first six months of 2024, borrowings net of cash holdings increased by €32.1 million to reach €152.3 million. Total Equity as at 30 June 2024 stood at €86.4 million representing 21% of total assets (31 December 2023: 21.7%).
Related party transactions
During the period under review, GO paid dividends amounting to €13.3 million to its parent company and effected payments amounting to €1.6 million for lease of properties, to entities ultimately controlled by Société Nationale des Télécommunications (Tunisie Telecom), the intermediate parent company.
Dividends
At the last Annual General Meeting of GO p.l.c., a final net dividend of €0.05 per share in respect of the year ended 31 December 2023 was approved and was paid to the shareholders on 30 May 2024. On 1 February 2024 the Company following a decision approved by the Board of Directors, distributed an interim dividend of €0.15 per share amounting to a total of €15,197,000, in respect of profits registered in the financial year ended 31 December 2023. The Board resolved to distribute an interim net dividend of €0.05 per share which will be paid to shareholders on 30 August 2024.
Approved by the Board of Directors on 9 August 2024 and signed on its behalf by
Lassâad Ben DHIAB Faker Hnid Chairman Director
Condensed Consolidated Interim Financial Statements
Statement of financial position As at 30 June 2024
| ASSETS | Note | As at 30 Jun 2024 Unaudited €000 |
As at 31 Dec 2023 Audited €000 |
|---|---|---|---|
| Non-current assets Property, plant and equipment Right-of-use assets Intangible assets Investment in associate Other investments Deferred tax assets Trade and other receivables |
5 | 192,250 51,040 81,414 2,388 3,599 1,186 6,097 |
187,609 53,189 83,491 2,382 5,190 914 5,665 |
| Total non-current assets | 337,974 | 338,440 | |
| Current assets Inventories Trade and other receivables Current tax assets Cash and cash equivalents Total current assets |
9,372 51,216 225 11,985 72,798 |
10,430 60,029 - 49,180 119,639 |
|
| Total assets | 410,772 | 458,079 | |
| EQUITY AND LIABILITIES EQUITY Share capital Reserves Retained earnings |
58,998 2,401 17,266 |
58,998 3,499 29,628 |
|
| Total equity attributable to equity holders of the Company |
78,665 | 92,125 | |
| Non-controlling interests | 7,777 | 7,315 | |
| Total equity | 86,442 | 99,440 |
Condensed Consolidated Interim Financial Statements
Statement of financial position - continued As at 30 June 2024
| LIABILITIES | As at 30 Jun 2024 Unaudited €000 |
As at 31 Dec 2023 Audited €000 |
|---|---|---|
| Non-current liabilities | ||
| Borrowings Lease liabilities |
152,651 37,462 |
159,200 40,839 |
| Deferred tax liabilities | 8,299 | 8,873 |
| Provisions for pensions | 379 | 414 |
| Trade and other payables | 10,574 | 12,844 |
| Total non-current liabilities | 209,365 | 222,170 |
| Current liabilities | ||
| Borrowings | 11,698 | 10,272 |
| Lease liabilities | 8,471 | 8,365 |
| Provisions for pensions | 2,938 | 2,903 |
| Current tax liabilities Trade and other payables |
5,060 86,798 |
3,812 111,117 |
| Total current liabilities | 114,965 | 136,469 |
| Total liabilities | 324,330 | 358,639 |
| Total equity and liabilities | 410,772 | 458,079 |
The notes on pages 12 to 21 are an integral part of these condensed consolidated interim financial statements.
The condensed consolidated interim financial statements set out on pages 4 to 21 were approved by the Board of Directors on 9 August 2024 and were signed on its behalf by:
Lassâad Ben DHIAB Faker Hnid Chairman Director
Condensed Consolidated Interim Financial Statements
Income statement For the period 1 January 2024 to 30 June 2024
| Revenue Cost of sales |
Six months ended 30 Jun 2024 Unaudited €000 113,544 (71,366) |
Six months ended 30 Jun 2023 Unaudited €000 120,486 (78,153) |
|---|---|---|
| Gross profit Administrative and other related expenses Other income Operating profit |
42,178 (27,540) 2,137 16,775 |
42,333 (26,014) 2,321 18,640 |
| Analysed as follows: EBITDA Depreciation and amortisation |
44,417 (27,642) |
45,338 (26,698) |
| Operating profit | 16,775 | 18,640 |
| Gain on disposal of equity investments at fair value through other comprehensive income (FVOCI) Finance income Finance costs |
1,690 353 (4,475) |
- 336 (3,896) |
| Profit before tax Tax expense |
14,343 (4,907) |
15,080 (6,111) |
| Profit for the period | 9,436 | 8,969 |
| Attributable to: Owners of the Company Non-controlling interests |
8,895 541 |
8,708 261 |
| Profit for the period | 9,436 | 8,969 |
| Earnings per share (euro cents) | 8c8 | 8c6 |
The notes on pages 12 to 21 are an integral part of these condensed consolidated interim financial statements.
Condensed Consolidated Interim Financial Statements
Statement of comprehensive income For the period 1 January 2024 to 30 June 2024
| Comprehensive income | Six months ended 30 Jun 2024 Unaudited €000 |
Six months ended 30 Jun 2023 Unaudited €000 |
|---|---|---|
| Profit for the period | 9,436 | 8,969 |
| Other comprehensive income Items that may be reclassified to profit or loss |
||
| Exchange differences on translation of foreign operations Release of fair value gain on disposal of equity investments at FVOCI |
(39) (1,665) |
84 - |
| Income tax related to components of other comprehensive income Release of fair value gain on disposal of equity investments at FVOCI |
567 | - |
| Total other comprehensive income for the period, net of tax |
(1,137) | 84 |
| Total comprehensive income for the period | 8,299 | 9,053 |
| Attributable to: | ||
| Owners of the Company | 7,758 | 8,772 |
| Non-controlling interests | 541 | 281 |
| Total other comprehensive income for the period | 8,299 | 9,053 |
Condensed Consolidated Interim Financial Statements
Statement of changes in equity - continued For the period 1 January 2024 to 30 June 2024
| Unaudited | Share capital €000 |
Reserves €000 |
Retained earnings €000 |
Total €000 |
Non controlling interests €000 |
Total equity €000 |
|---|---|---|---|---|---|---|
| Balance at 1 January 2023 | 58,998 | 336 | 31,333 | 90,667 | 8,318 | 98,985 |
| Comprehensive income Profit for the period |
- | - | 8,708 | 8,708 | 261 | 8,969 |
| Other comprehensive income: Exchange differences on translation of foreign operations |
- | - | 64 | 64 | 20 | 84 |
| Total comprehensive income | - | - | 8,772 | 8,772 | 281 | 9,053 |
| Transactions with owners in their capacity as owners Distributions to owners: Dividends to equity holders Changes in ownership interest that do not result in loss of |
- | - | (9,118) | (9,118) | (2,450) | (11,568) |
| control: Non-controlling interest arising on acquisition of subsidiary |
- | - | - | - | 349 | 349 |
| Total transactions with owners |
- | - | (9,118) | (9,118) | (2,101) | (11,219) |
| Balance at 30 June 2023 | 58,998 | 336 | 30,987 | 90,321 | 6,498 | 96,819 |
Condensed Consolidated Interim Financial Statements
Statement of changes in equity - continued For the period 1 January 2024 to 30 June 2024
| Unaudited | Share capital €000 |
Reserves €000 |
Retained earnings €000 |
Total €000 |
Non controlling interests €000 |
Total equity €000 |
|---|---|---|---|---|---|---|
| Balance at 1 January 2024 | 58,998 | 3,499 | 29,628 | 92,125 | 7,315 | 99,440 |
| Comprehensive income Profit for the period |
- | - | 8,895 | 8,895 | 541 | 9,436 |
| Other comprehensive income: Exchange differences on translation of foreign operations Release of fair value gain on disposal |
- | - | (39) | (39) | - | (39) |
| of equity investments at FVOCI | - | (1,098) | - | (1,098) | - | (1,098) |
| Total other comprehensive income | - | (1,098) | (39) | (1,137) | - | (1,137) |
| Total comprehensive income | - | (1,098) | 8,856 | 7,758 | 541 | 8,299 |
| Transactions with owners in their capacity as owners Distributions to owners: |
||||||
| Dividends to equity holders | - | - | (20,263) | (20,263) | (2,450) | (22,713) |
| Acquisition of further stake in subsidiary Non-controlling interest |
- | - | (955) | (955) | 1,215 | 260 |
| arising on acquisition of subsidiary |
- | - | - | - | 1,156 | 1,156 |
| Total transactions with owners |
- | - | (21,218) | (21,218) | (79) | (21,297) |
| Balance at 30 June 2024 | 58,998 | 2,401 | 17,266 | 78,665 | 7,777 | 86,442 |
The notes on pages 12 to 21 are an integral part of these condensed consolidated interim financial statements.
Condensed Consolidated Interim Financial Statements
Statement of cash flows For the period 1 January 2024 to 30 June 2024
| Six months ended 30 Jun 2024 Unaudited €000 |
Six months ended 30 Jun 2023 Unaudited €000 |
|
|---|---|---|
| Cash flows from operating activities | ||
| Operating profit | 16,775 | 18,640 |
| Adjustments for: | ||
| Depreciation and amortisation | 27,642 | 26,698 |
| Net increase in provisions and write- | ||
| downs in relation to receivables and inventories | 900 | 418 |
| Gain on disposal of investment | - | (309) |
| Provisions for pensions | - | 50 |
| Voluntary retirement costs | 1,283 | 250 |
| 46,600 | 45,747 | |
| Changes in working capital: | ||
| Inventories | 1,051 | (1,036) |
| Trade and other receivables | 11,086 | (927) |
| Trade and other payables | (22,906) | (7,153) |
| Cash generated from operations | 35,831 | 36,631 |
| Interest paid on bank overdrafts | (52) | (93) |
| Interest paid on lease liabilities | (726) | (796) |
| Tax paid | (1,900) | (1,492) |
| Payments under voluntary retirement scheme | - | (267) |
| Payments in relation to pension obligations | - | (41) |
| Net cash from operating activities | 33,153 | 33,942 |
Condensed Consolidated Interim Financial Statements
Statement of cash flows - continued For the period 1 January 2024 to 30 June 2024
| Six months ended 30 Jun 2024 Unaudited €000 |
Six months ended 30 Jun 2023 Unaudited €000 |
|
|---|---|---|
| Cash flows from investing activities | ||
| Payments to acquire property, plant and equipment | ||
| and intangible assets | (34,303) | (32,258) |
| Payments to acquire subsidiary | (1,228) | (823) |
| Payments to acquire other investments | (50) | (233) |
| Proceeds from disposal of investments | 1,690 | 334 |
| Net cash used in investing activities | (33,891) | (32,980) |
| Cash flows from financing activities | ||
| Repayment of bank and other loans | (8,575) | (2,463) |
| Proceeds from bank and other loans | - | 15,000 |
| Principal elements of lease payments | (4,565) | (5,256) |
| Dividends paid to controlling shareholders | (20,176) | (9,123) |
| Dividends paid to non-controlling shareholders | (2,190) | (2,450) |
| Interest paid on borrowings | (3,382) | (3,190) |
| Net cash used in financing activities | (38,888) | (7,482) |
| Net movements in cash and cash equivalents | (39,626) | (6,520) |
| Cash and cash equivalents at beginning of period |
43,666 | 6,200 |
| Exchange differences on cash and cash | ||
| equivalents | (6) | 72 |
| Movement in cash pledged as guarantees | (1,011) | (303) |
| Cash and cash equivalents at end of period | 3,023 | (551) |
In addition to the cash and cash equivalents presented above, a subsidiary held restricted bank deposits amounting to €1.674 million (2023: €2.045 million). These deposits act as collateral for issued shortterm as well as long-term letters of guarantee and are expected to be partly released back to the Company's liquidity over time – an amount of €371,000 was released in June 2024. Another amount of €325,000 is due for release in June 2025.
The notes on pages 11 to 21 are an integral part of these condensed consolidated interim financial statements.
Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements For the period 1 January 2024 to 30 June 2024
1 General information
GO p.l.c. (the Company) is a limited liability company domiciled and incorporated in Malta. The condensed consolidated interim financial statements of the Company as at 30 June 2024 and for the six-month period then ended comprise the Company and its subsidiaries (together referred to as the "Group"). The Group is Malta's leading integrated telecommunications services provider and its high-speed networks form the backbone of the island's modern communications infrastructure. The services provided by the Group include fixed-line and mobile telephony, data and TV services for consumers and business clients. The Group also provides business clients with data centre facilities and ICT solutions.
The Group also operates in Cyprus through Cablenet Communication Systems p.l.c. (Cablenet) which provides broadband, cable TV and fixed and mobile telephony services to consumers and business clients.
The consolidated financial statements of the Group as at and for the year ended 31 December 2023 are available upon request from the Company's registered office at Fra Diegu Street, Marsa, MRS 1501, Malta. They are also available for viewing on its website at www.go.com.mt.
These condensed consolidated interim financial statements were approved for issue by the Board of Directors on 9 August 2024.
The condensed consolidated interim financial statements have been reviewed in accordance with the requirements of ISRE 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity".
2 Basis of preparation
The condensed consolidated interim financial statements as at and for the six-month period ended 30 June 2024 have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the EU applicable to interim financial reporting (International Accounting Standard 34, "Interim Financial Reporting"). The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2023, which have been prepared in accordance with IFRSs as adopted by the EU.
Financial position of the Group and the Group's cash flow forecasting process:
As of 30 June 2024, the Group's current liabilities exceeded its current assets by €42.1 million, (31 December 2023: €16.8 million). This net current liability position decreases to €15 million when taking into consideration non-cash assets and liabilities and the Group's unutilised banking facilities.
The Group anticipates generating substantial earnings in the upcoming financial year through its cash-generating units. This expected performance is projected to effectively cover the Group's cash flow and liquidity requirements. Based on the Group's cash flow projections and the financial statements' published data, the Group consistently generates cash flows that exceed the current shortfall. This provides confidence in the Group's ability to meet its short-term liquidity needs. Additionally, the Group has access to unused banking facilities, which are integrated into its liquidity management strategy.
Looking forward the Group anticipates that the peak capex programme will be reached in 2024 when the fibre roll-out will be nearing completion. This means that the Group's most capitalintensive phase of its investment programme is nearing completion and this shall lead to increased cash inflows.
Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements For the period 1 January 2024 to 30 June 2024
2 Basis of preparation - continued
These factors are reflected in the Group's cash flow forecasts together with cash management facilities, reinforcing the Group's capacity to manage its liquidity effectively.
The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2023, as described in those annual financial statements.
New and amended standards adopted by the Group
A number of amended standards became applicable for the current reporting period. There is no impact on the adoption of these revisions on the Group's accounting policies and on the Group's financial results and financial position.
Impact of standards issued but not yet applied by the Group
Certain new standards, amendments and interpretations to existing standards have been published by the date of authorisation for issue of these financial statements but are mandatory for the Group's accounting periods beginning after 1 January 2024. The Group has not early adopted these revisions to the requirements of IFRSs as adopted by the EU, and the Company's directors are of the opinion that there are no requirements that will have a possible significant impact on the Group's financial statements in the period of initial application.
3 Fair values of financial and non-financial instruments
Financial instruments
The Group is required to disclose fair value measurements by level of a fair value measurement hierarchy for financial instruments (Level 1, 2 or 3). The different levels of the fair value hierarchy are defined as fair value measurements using:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly i.e. as prices, or indirectly i.e. derived from prices (Level 2).
- Inputs for the asset or liability that are not based on observable market data i.e. unobservable inputs (Level 3).
Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements For the period 1 January 2024 to 30 June 2024
3 Fair values of financial and non-financial instruments - continued
At 30 June 2024 and 31 December 2023, the carrying amounts of certain financial instruments not carried at fair value, principally comprising cash at bank, receivables, payables, accrued expenses and short-term borrowings, reflected in the financial statements are reasonable estimates of fair value in view of the nature of these instruments or the relatively short period of time between the origination of the instruments and their expected realisation. The fair value of advances to related parties and other balances with related parties, which are short-term or repayable on demand, is equivalent to their carrying amount.
The fair value of non-current financial instruments, mainly borrowings and lease liabilities, is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. The fair value of the Group's non-current floating interest rate bank borrowings and lease liabilities at the end of the reporting period is not significantly different from the carrying amounts. The current market interest rates utilised for discounting purposes, which were almost equivalent to the respective instruments' contractual or related interest rates, are deemed observable and accordingly these fair value estimates have been categorised as Level 2.
Non-financial instruments
Intangible assets held by the Group mainly consist of goodwill attributable to the excess of the purchase price in respect of acquisitions effected in previous years over the carrying amount of net assets acquired allocated to the identifiable assets and liabilities of the acquired entity. The Group made judgements and estimates in relation to the fair value allocation of the purchase price. The amount of goodwill initially recognised as a result of a business combination is dependent on the allocation of the purchase price to the fair value of the identifiable assets acquired and the liabilities assumed. The determination of the fair value of the assets and liabilities is based, to a considerable extent, on management's judgement. Allocation of the purchase price affects the results of the Group as intangible assets with a finite life are amortised, whereas intangible assets with an indefinite life and goodwill are not amortised.
The recoverable amount of the cash-generating units (CGUs), to which intangible assets were allocated, as at 30 June 2024 was determined based on value in use (VIU) calculations consistent with the methods used as at 31 December 2023 (for further details refer to Note 7 of the 2023 annual report). Considering the prevailing economic circumstances, management determined the deterioration in performance or long-term growth rates which would need to occur, or the increase in discount rate which would need to be applied to the models, that may lead to impairment of goodwill or other intangible assets. The VIU of the CGUs, as a result of this assessment, remains in excess of the carrying amounts by a comfortable headroom.
Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements For the period 1 January 2024 to 30 June 2024
4 Segment information
4.1 Operating segments
The Group has three reportable segments, which are effectively the Group's key and distinct strategic business units and cash-generating units, as they represent the lowest level at which separately identifiable cash flows can be identified. The strategic business units are managed separately with their own separate management structure and Board of Directors.
The following summary describes the operations in each of the Group's reportable segments:
MaltaTelecommunication Services (Malta Telecommunications CGU) comprise the Group's fixedline telephony services, mobile telephony services, digital television services, sale of broadband, internet services and other business communication and security solutions provided within Malta. The new subsidiary AQS which provides solar solutions, has been included under this segment due to materiality levels. This will be monitored and if the amounts exceed the threshold, they will be separately identified as a reportable segment.
Data Centre Services (Data Centre CGU) comprise the Group's operations of BMIT Technologies p.l.c., which provides data centre facilities and ICT solutions in Malta.
Cyprus Telecommunication Services (Cyprus Telecommunications CGU) comprise the Group's operations of the Cypriot subsidiary, Cablenet Communications Systems p.l.c. The company provides broadband, cable television and fixed and mobile telephony services. The operations of the Cypriot subsidiary constitute a reportable segment in view of the specific nature and characteristics of the Cypriot telecommunications sector, giving rise to a varied degree of business risks and returns.
The Group's internal reporting to the Board of Directors and Senior Management is analysed according to these three segments. For each of these three strategic business units, the Board of Directors reviews internal management reports at least on a monthly basis.
Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements For the period 1 January 2024 to 30 June 2024
4 Segment information - continued
4.1 Operating segments - continued
| Ma l ta Op er |
t ion a s |
Cy Op p ru s |
t ion er a s |
To ta |
l | |||
|---|---|---|---|---|---|---|---|---|
| Te lec om mu |
ica t ion n s |
Da ta Ce |
tre n |
Te lec om mu |
ica t ion n s |
|||
| 3 0 |
Ju n |
|||||||
| 2 0 2 4 |
2 0 2 3 |
2 0 2 4 |
2 0 2 3 |
2 0 2 4 |
2 0 2 3 |
2 0 2 4 |
2 0 2 3 |
|
| Un d i d te au |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
| To ta l re ve nu e |
6 4, 8 2 6 |
7 4, 0 9 8 |
1 6, 7 3 8 |
1 4, 8 3 7 |
3 6, 1 7 6 |
3 7, 3 7 3 |
1 1 7, 7 4 0 |
1 2 6, 3 0 8 |
| In ter t re -se g me n ve nu e |
( 1, 7 5 5 ) |
( 4, 9 4 0 ) |
( 2, 4 4 1 ) |
( 8 8 2 ) |
- | - | ( 4, 1 9 6 ) |
( 5, 8 2 2 ) |
| Re fro l c ter tom ve nu e m ex na us ers |
6 3, 0 7 1 |
6 9, 1 5 8 |
1 4, 2 9 7 |
1 3, 9 5 5 |
3 6, 1 7 6 |
3 7, 3 7 3 |
1 1 3, 5 4 4 |
1 2 0, 4 8 6 |
| T im ing f re i ion t o ve nu e r ec og n |
||||||||
| Ov t im er e |
4 8, 5 2 3 |
4 8, 1 8 6 |
1 2, 4 9 4 |
1 2, 3 0 5 |
3 0, 1 3 0 |
2 9, 3 5 7 |
9 1, 1 4 7 |
8 9, 8 4 8 |
| A t a in t in t im p o e |
1 4, 4 8 5 |
2 0, 9 2 7 |
1, 8 0 3 |
1, 6 0 5 |
6, 0 4 6 |
8, 0 1 6 |
2 2, 3 9 7 |
3 0, 6 3 8 |
| Re fro l c ter tom ve nu e m ex na us ers |
6 3, 0 7 1 |
6 9, 1 5 8 |
1 4, 2 9 7 |
1 3, 9 5 5 |
3 6, 1 7 6 |
3 7, 3 7 3 |
1 1 3, 5 4 4 |
1 2 0, 4 8 6 |
| Re b le f i be for ta t p t tax p or se g me n ro e |
1 1, 0 8 7 |
1 0, 8 9 6 |
3, 6 8 7 |
3, 2 4 7 |
( 1, 0 2 ) 5 |
9 1 0 |
1 4, 3 4 3 |
1 0 8 0 5, |
| 3 0 Ju n |
3 1 De c |
3 0 Ju n |
3 1 De c |
3 0 Ju n |
3 1 De c |
3 0 Ju n |
3 1 De c |
|
| 2 0 2 4 |
2 0 2 3 |
2 0 2 4 |
2 0 2 3 |
2 0 2 4 |
2 0 2 3 |
2 0 2 4 |
2 0 2 3 |
|
| € 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
€ 0 0 0 |
|
| ( ) Au d i te d |
( ) Au d i te d |
( ) Au d i te d |
( ) Au d i te d |
|||||
| Re ta b le t a ts p or se g me n ss e |
3 0 6, 2 0 9 |
3 2 7, 2 8 0 |
2 5, 3 7 0 |
3 1, 3 0 7 |
1 3 9, 4 6 9 |
1 5 0, 0 4 1 |
4 7 1, 0 4 8 |
5 0 8, 6 2 8 |
| Re ta b le t l ia b i l i t ies p or se g me n |
2 3 7, 1 2 2 |
2 6 4, 3 0 2 |
1 5, 2 9 8 |
2 4, 2 3 8 |
1 1 1, 5 4 9 |
1 2 0, 6 4 8 |
3 6 5, 8 2 4 |
4 0 9, 1 8 8 |
Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements For the period 1 January 2024 to 30 June 2024
4 Segment information - continued
4.1 Operating segments - continued
A reconciliation of reportable segment results, assets and liabilities, to the amounts presented in the consolidated financial statements, is as follows:
| Profit Total profit for reportable segments and consolidated profit |
Six months ended 30 Jun 2024 Unaudited €000 |
Six months ended 30 Jun 2023 Unaudited €000 |
|---|---|---|
| before tax | 14,343 | 15,080 |
| 30 Jun 2024 Unaudited €000 |
31 Dec 2023 Audited €000 |
|
| Assets | ||
| Total assets for reportable segments Inter-segment eliminations |
471,048 (60,276) |
508,628 (47,497) |
| Consolidated total assets | 410,772 | 461,131 |
| Liabilities Total liabilities for reportable segments Inter-segment eliminations |
365,824 (41,494) |
409,188 (47,497) |
| Consolidated total liabilities | 324,330 | 361,691 |
4.2 Information about geographical segments
The Group's revenues are derived from operations carried out in Malta and in Cyprus. The Telecommunications segment for both Malta and Cyprus also derives revenue from incoming interconnect traffic and inbound roaming from foreign operators worldwide. Considering the nature of the Group's activities, its non-current assets are predominantly located in Malta and Cyprus.
4.3 Information about major customers
The Group does not have any particular major customer, as it largely derives revenue from a significant number of customers availing of its services. Accordingly, the Group does not deem necessary any relevant disclosures in respect of reliance on major customers.
Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements For the period 1 January 2024 to 30 June 2024
5 Property, plant and equipment
(a) Acquisitions and disposals
During the six months ended 30 June 2024, the Group acquired assets, primarily plant and equipment, with a cost of €19.9 million (six months ended 30 June 2023: €18.5 million).
(b) Capital commitments
The following are capital commitments of the Group:
| 30 Jun 2024 Unaudited €000 |
31 Dec 2023 Audited €000 |
|
|---|---|---|
| Contracted for: Property, plant and equipment Intangible assets |
8,213 2,173 |
8,967 511 |
| Authorised but not yet contracted for: | ||
| Property, plant and equipment | 22,037 | 14,458 |
| Intangible assets | 800 | 800 |
| 33,223 | 24,736 |
6 Investment in subsidiaries
Acquisition of subsidiary
On 27 March 2024, the Company announced that that it has signed a share purchase agreement that will result in the acquisition, by the Company, of 51% shareholding in AQS Med Limited (C 50569) ("AQS"). On 28 June 2024, the Company concluded the purchase of 51% shareholding in AQS.
The total consideration paid for acquiring the shares was €1,203,437, with a potential additional earnout of €1,984,063 based on the performance of AQS over a four-year period. According to the agreement, if the agreed performance is met after four years, GO has the option to buy out the minority shareholders using a predetermined formula, and the minority shareholders can also require the Company to purchase their shares based on the similar formula. This call and put option will expire in 2028. Currently, neither the potential earnout payment nor the call and put option have been assigned a value. The Company will assess performance during the next six months against projected targets to determine the valuation of both the earnout and the call and put option
AQS was established in 2010 when the renewable energy market in Malta was still an emerging one. It has since established itself as a market leader having been entrusted with some of the largest installations on the island.
This strategic acquisition underlines the Company's commitment to renewable energy.
Furthermore, the Company believes that through this acquisition it can help support the achievement of Malta's environmental targets which, at the same time, present an opportunity to grow in the energy vertical.
Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements For the period 1 January 2024 to 30 June 2024
| 6 | Investment in subsidiaries - continued | |
|---|---|---|
| Acquisition of subsidiary - continued | ||
| Details of the purchase consideration are as follows: | €000 | |
| Fair value of initial 51% equity holding in AQS acquisition date | 1,203 | |
| The estimated fair values of identifiable assets and liabilities of AQS as at date of acquisition were as follows: |
€000 | |
| Property, plant and equipment Other non-current assets (principally Trade and other receivables) Current assets (principally inventory and trade and other receivables) Trade and other payables Non-current loan & borrowings |
876 267 773 (685) (1,333) |
|
| Net identifiable assets acquired Non-controlling interests |
(103) (1,156) |
Non-controlling interests have been measured at the related proportion of the net identifiable assets at acquisition.
Intangible assets 2,463
Since AQS was acquired on 28 June 2024, the Company is still in the process of finalising its Purchase Price Allocation and therefore at this stage the composition of the intangible has yet to be determined.
No further disclosures in respect of this acquisition were deemed necessary, in view of the fact that the acquired subsidiary is not deemed material to GO, as a reporting entity in terms of the requirements of IFRS 3 Business Combinations.
Further acquisition of BMIT
In March 2024, BMIT declared a dividend of €0.025 per share for the year ending 31 December 2023. The directors of BMIT offered all shareholders the option to receive this dividend either in cash or as new ordinary shares at an attribution price of €0.351 per share. GO converted its dividend of €2,550,000 into ordinary shares, acquiring 7,264,957 additional shares in BMIT whilst the minority shareholders acquired 741,625 additional shares. As a result, GO's shareholding in BMIT increased by 1.5%, bringing the total ownership to 52.5%.
1,203
Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements For the period 1 January 2024 to 30 June 2024
7 Dividends
A final dividend in respect of the year ended 31 December 2023 of €0.05 (2023: €0.09) per share, amounting to €5,066,000 (2023: €9,117,342), was proposed by the Board of Directors. The 2023 final dividend was approved for payment by the Board of Directors during the Annual General Meeting held on 30 May 2024 and accordingly was reflected within these condensed consolidated interim financial statements.
On 1 February 2024 the Company following a decision approved by the Board of Directors, distributed an interim dividend of €0.15, net of taxation, per share amounting to a total of €15,197,000 in respect of profits registered in the financial year ended 2023.
The Board resolved to distribute an interim dividend of €0.05 per share which will be payable on 30 August 2024. The financial statements do not reflect this proposed dividend, which will be accounted for within shareholders' equity as an appropriation of retained earnings for the year ending 31 December 2024.
8 Contingencies
There were no major changes in the contingencies of the Company and its subsidiaries from those disclosed in the consolidated financial statements of the Group for the year ended 31 December 2023.
9 Related party transactions
(a) Parent and ultimate controlling party
The Company and its subsidiaries have a related party relationship with Société Nationale des Télécommunications (Tunisie Telecom), the Company's ultimate parent, related entities ultimately controlled by Tunisie Telecom, together with the Company's directors (key management personnel). 65.4% of the issued share capital of the Company is held by TTML Limited, a wholly owned subsidiary of Tunisie Telecom, which is registered in Malta. Dubai Holding LLC (GO's former ultimate parent) and all entities ultimately controlled by it are still considered to be related parties, in view of Dubai Holding LLC's interest in and significant influence on GO's current ultimate parent. The Tunisian Government holds a 65% shareholding in Tunisie Telecom, and Emirates International Telecommunications, a subsidiary of Dubai Holding LLC, owns the other 35%.
Condensed Consolidated Interim Financial Statements
Notes to the Condensed Consolidated Interim Financial Statements For the period 1 January 2024 to 30 June 2024
9 Related party transactions - continued
(b) Related party transactions
Consistent with the disclosures in the audited financial statements for the year ended 31 December 2023, the Group has a related party relationship with its current and former ultimate parents and entities ultimately controlled by them (see above), with key management personnel together with close members of their family and entities controlled by them.
The principal related party transactions during the six-month period under review comprise:
| Six months ended 30 Jun 2024 30 Jun 2023 Unaudited €000 |
Six months ended Unaudited €000 |
|
|---|---|---|
| Current ultimate parent and related entities Dividends paid to |
13,251 | 5,965 |
| Former ultimate parent and related entities Payments effected relating to leased assets |
1,609 | 1,925 |
Statement pursuant to Capital Markets Rules 5.75.3
I hereby confirm that to the best of my knowledge:
- the condensed consolidated interim financial statements give a true and fair view of the financial position of the Group as at 30 June 2024, and of its financial performance and cash flows for the six-month period then ended in accordance with International Financial Reporting Standards as adopted by the EU applicable to interim financial reporting (International Accounting Standard 34, "Interim Financial Reporting");
- the Interim Directors' report includes a fair review of the information required in terms of Capital Markets Rules 5.81 to 5.84.
Lassâad Ben DHIAB Chairman
9 August 2024
Independent auditor's report
To the Board of Directors of GO p.l.c. Report on Review of Condensed Consolidated Interim Financial Information
Introduction
We have reviewed the accompanying condensed consolidated interim statement of financial position of GO p.l.c. and its subsidiaries (the Group) as at 30 June 2024, the related condensed consolidated income statement and statements of comprehensive income, changes in equity and cash flows for the six-month period then ended and other explanatory notes ("the condensed consolidated interim financial statements"). The directors are responsible for the preparation and fair presentation of these condensed consolidated interim financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU applicable to interim financial reporting (International Accounting Standard 34 "Interim Financial Reporting"). Our responsibility is to express a conclusion on these condensed consolidated interim financial statements based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of condensed consolidated interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting".
Other matters
This report, including the conclusion, has been prepared for and only for the Group and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Stefan Bonello Principal
For and on behalf of PricewaterhouseCoopers
78 Mill Street Zone 5, Central Business District Qormi Malta
9 August 2024
a) The maintenance and integrity of the GO p.l.c. website is the responsibility of the Directors of the Company; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the condensed consolidated interim financial information since this was initially presented on the website. b) Legislation in Malta governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.