28 AUGUST 2002

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Maltacom announces financial results

• Intends publishing results on half-yearly basis
• Turnover up
• Profits after tax slightly down
• Vodafone divestiture ongoing

By Kurt Sansone

Maltacom Chairman Maurice Zarb Adami yesterday announced that the company would no longer publish its financial results on a quarterly basis given the impending liberalisation of the communications sector by January 2003. He contended that the quarterly results could provide fodder for Maltacom’s competitors.

Mr Zarb Adami reiterated that the group did not need to publish its financial results at more intervals than required by law.

Maltacom was required to publish quarterly results by virtue of its part privatisation in 1997, a development that led to Maltacom listing itself on both the Malta and London stock exchanges. Mr Zarb Adami said that the Malta Stock Exchange would be informed in due course of this development.

Meanwhile, the financial results for the period ended 30 June 2002 show an increase of Lm2 million in turnover for the Maltacom Group over the results obtained in the same period last year.

Profit before tax was also up slightly to Lm5.75 million from Lm5.66 million registered last year.

However, due to a higher tax bill this year, profits after tax for the Group registered a decline of Lm0.2 million to reach Lm3.8 million.

Earnings per share were also down to 3c7 from 4c0 obtained in June 2001.

Addressing the presentation yesterday Group Chief Operations Officer Joseph Azzopardi said that the expansion continued to be financed partially by internal cash generation.

Mr Azzopardi commented positively on Go Mobile’s performance. The mobile telephony subsidiary now has an active subscriber base of 87,000, which amounts to around 40 per cent of the market share. Mr Azzopardi added that Go Mobile now has roaming facilities available in over 60 countries.

Cellular traffic revenue for the Group increased by 35.5 per cent over the same period last year and partly contributed to the decline in domestic fixed line traffic revenue, which went down by 6.9 per cent.

Mobile traffic now represents 28 per cent of Maltacom’s turnover an increase of five per cent over last year’s figure. Local fixed line traffic represents 19 per cent of Maltacom’s turnover a decrease from the 22 per cent registered last year.

The Group also saw revenue from Internet-related services increase by 74.4 per cent while international outgoing fixed line telephony traffic revenue went down by 10.2 per cent.

A positive achievement was the reduction of payroll as a percentage of Maltacom plc’s operating performance. In June this year payroll for the mother company represented 27 per cent of the operating performance down by three per cent. This was due to the early retirement scheme, which saw the work force of Maltacom plc go down to 1,069.

The delay in the implementation of the new billing system created a cash flow problem for the company, which had to resort to overdraft facilities. However, the Maltacom officials said that the problem is a short-term one given that the system is now up and running thus enabling the company to recoup the lost time in a matter of months.

Rounding up the presentation Maltacom’s chairman Maurice Zarb Adami said that the company intended introducing a new voluntary retirement scheme.

Mr Zarb Adami expressed his hope of overshooting the target set five years ago to shed 500 employees but stressed that this was to be achieved solely on a voluntary basis. Outlining the Group’s prospects for the rest of the year Mr Zarb Adami envisaged further growth in mobile telephony. He said the company would continue to work on its TV project of which a sample transmission was introduced to the people present.

Commenting on the Vodafone share divestiture Maltacom Group Chief Executive Officer Stephen Muscat said that the due diligence exercise by a number of firms, including foreign firms, was still underway. Mr Muscat did not say how many firms were interested in the shareholding and neither did he specify which companies were involved.

Reacting to comments from the floor about whether Maltacom was bound to sell its shares by the Communications Authority, Maurice Zarb Adami reiterated that "nobody is bound to do what is impossible to achieve."

Mr Zarb Adami said that Maltacom had no intention of holding on to its shareholding in Vodafone but it wanted to get a fair price for its shares. The chairman said that the delay in the disposal of the shares was partly to blame on Vodafone’s non co-operation in providing adequate company information to potential investors who wanted to be informed about the performance of the company.


Copyright © Network Publications Malta.
Editor: Saviour Balzan
The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07, Malta
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