Stronger-than-expected revenues have allowed GO plc to post over €53 million in gross profit for 2022, beating its forecast for the year by 8.7 per cent.

In its updated financial statement for the year, the company noted that year-on-year revenue growth was higher than originally expected on account of the stronger than anticipated post pandemic recovery, as well as the company’s increased success in capturing further market share across its principal business lines.

Subscriber gains in mobile and fixed line services (broadband), increased spend per customer as well as a strong recovery in inbound roaming revenues all contributed to the successes achieved in 2022.

The year under review also saw a marked increase in bespoke technical solutions for businesses as well as the award of several contracts that included sizeable hardware and equipment elements.

Revenue from core telecom services alone amounted to €111.8 million, an increase of €4.6 million (or 4.2 per cent) compared to 2021. Revenue from sale of goods (hardware, equipment) amounted to €12.1 million, an increase of 74 per cent or €5.1 million over FY2021.

On the costs front, GO kept tight control on costs and was very successful in mitigating against the significant inflation experienced most especially in the second half of the year under review.

The financial summary showed that whilst 2023 revenues were expected to rise by 3.2 per cent to €133 million, EBITDA is expected to fall by 3.1 per cent to €52.5 million. GO cited an increase in the average revenue per user (ARPU) as the main driver of this revenue growth. The company, however, expects the increase in direct costs and administrative expenses to dampen the increase in revenue and push EBITDA down from the €54.2 million achieved in 2022.

Looking at costs, net finance costs are forecasted to be €3.96 million for 2023, up from the €3.34 million of 2022. Higher borrowing costs, due to the significant increase in interest rates that impacted the EURIBOR rate, and the “slight” increase in net bank borrowings (at variable rates) were given as a reason for this increase.

Overall, the company expects a fall in net profit, from the €15.7 million of 2022 to the expected €14.4 million of 2023, with return on assets dropping slightly from to 4.8 per cent from the 5.5 per cent of 2022.

Borrowings, net of cash are projected, at €80.9 million at the end of 2023, an increase of €7.4 million compared to 2022. This increase represents “incremental bank borrowings required to sustain the projected capital investments, debt servicing requirements as well as lease obligations.” The Gearing Ratio for the company (calculated as total debt divided by total debt plus equity) is expected to increase to 52.4 per cent from the 51.4 per cent of 2022.

The value of total assets by the end of 2023 is expected to increase to €299.4 million while equity is projected to remain on similar levels of 2022 at €111.3 million. The company also expects to be slightly less liquid as the current ratio falls from the 0.73x of 2022 to the 0.67x projected for 2023.

GO expects further growth in normalised revenue and profitability for 2023 over 2022 results. This forecast remains positive even when considering the one-time positive effects of the post-pandemic population growth experienced in 2022 which “brought about a substantial increase in demand for telecommunications services, and a recovery in international wholesale activity driven by a strong recovery in tourism.”

The company however expects subscriber growth to stabilise. Fixed line traffic and revenue is expected to continue to drop in line with previous years, while revenue from wholesale services is expected to remain on similar levels of 2022. Overall telecom services revenues from consumer, business and wholesale activities are expected to grow by 1.4 per cent compared to 2022.