Company Registration Number: C 22334
GO p.l.c.
Annual Financial Report and Consolidated
Financial Statements
31 December 2021
GO p.l.c.
Annual Financial Report and Consolidated Financial Statements - 31 December 2021
Chief Executive Officer’s review
1 - 3
Directors’ report
4 - 20
Corporate governance - Statement of compliance
21 - 29
Remuneration report
30 - 35
Company information
Statements of financial position
37 - 38
Income statements
Statements of comprehensive income
Statements of changes in equity
41 - 44
Statements of cash flows
Notes to the financial statements
46 - 140
Five-year record
Independent auditor’s report
GO p.l.c.
Annual Financial Report and Consolidated Financial Statements - 31 December 2021
Chief Executive Officer’s review
Purpose driven performance
2021 was undoubtedly a remarkable year. The second year of a global pandemic that significantly impacted our economic and social fabric, a year where market pressures continued mounting with inflation increasing cost of raw materials, energy and transportation. This notwithstanding, demand for robust and resilient communications services continued. 2021 was another year where GO demonstrated its resiliency in the face of challenges.
Our purpose is to drive a digital Malta where no one is left behind. By living our purpose every day, we forge stronger relationships between us, and with our customers. This allows us to serve our customers brilliantly, and take decisions swiftly, and clearly, in the interest of the business. Our NPS scores reflect the efforts of our teams across the board, reaching record highs, mainly driven by the growth in fibre connections, unlimited mobile post-paid plans, and excellent customer service.
We are mindful of the fact that we cannot serve our customers brilliantly if we don’t start within and nurture our own people. We are working tirelessly to create the right culture where people can learn, grow, and thrive. To this end, we launched GO Academy, which in addition to providing the technical and functional training that is required to keep up the pace with market trends, also offers bespoke training across three main pillars: customer centricity, digital excellence, and purposeful leadership. During 2021 we effectively doubled our investment in people training and development, encouraging self-driven learning that reflects everyone’s needs.
Operating throughout the pandemic did take its toll on our people. It challenged us physically, psychologically, and emotionally. However, we took every measure to safeguard our people’s wellbeing and found alternative ways of staying connected. Consequently, we have registered the highest employee satisfaction scores ever achieved within the Company. The pandemic, and the ensuing restrictions on international travel also negatively impacted roaming volumes and related revenues, which although marginally higher than those recorded in 2020, are still less than half that recorded in 2019. This however was offset by revenue generated from a respectable increase in both broadband and mobile subscriber base, coupled by a drive to manage costs.
Driving a digital Malta: investing in our networks
GO has long established itself as one of the major investors in Malta’s digital infrastructure. By far, the largest contribution is our plan to roll-out a nationwide True Fibre network  a network that is capable of delivering the fastest broadband speeds imaginable, straight to one’s living room. In 2021 alone, we passed 32,000 homes with True Fibre, a record year, bringing nationwide coverage up to 52%. More importantly however, we successfully piloted a new way of passing fibre that promises faster, more efficient and environmentally friendly roll-out.
A great fibre network is also essential for the delivery of a true 5G experience that delivers the maximum speeds possible. Our teams have worked tirelessly over the past years to deploy True Fibre to all our mobile sites in preparation for this next mobile milestone that came to fruition in December 2021 as the first 5G mobile sites were set up. This progression toward 5G mobile services, with an investment estimated to exceed €16 million, is a natural step forward in ensuring that we keep on enabling peoples’ lives and businesses through the latest technologies.
GO p.l.c.
Annual Financial Report and Consolidated Financial Statements - 31 December 2021
Chief Executive Officer’s review - continued
Recent events in the world have highlighted the risks of being over reliant on one supplier for any kind of resource, which is why it was important for us to have additional redundancy on international connectivity to another country other than Italy. Our investment of €25 million in a third submarine cable means that Malta now has connectivity to France, Egypt and beyond, a critical development that is contributing to significantly improving the country’s overall connectivity and competitiveness.
Continuously investing in our networks, means that we are better positioned to embrace technologies such as Internet of Things (IoT). Through GO business we launched our first IoT product in the form of an Asset Tracking solution that allows business clients to keep track of their valuable equipment and assets. GO’s decision to invest in this technology is driven by the belief that IoT solutions will play a critical role in digital innovation and in achieving operational efficiencies.
Providing the best customer experience
During 2021, we made significant inroads in improving our overall customer experience. We launched a new customer promise, which aims to ensure that none of our customers go without internet for more than a few hours. We digitised and streamlined several processes that led to greater efficiencies across the board; we empowered our front liners to do what is right by the customer and minimise escalations.
We also focused a lot of our energy into improving our digital contact channels such as the web chat bot and WhatsApp, offering a wide range of contact mechanisms for our customers to reach us. For our business customers, we launched a new and improved customer portal through which they can independently manage their services. Today, more than 77% of GO customers are using the GO App or MyGO portal.
Our investment strategy
Investing in a digital Malta goes beyond investing in digital infrastructure, it also means investing in, and supporting start-ups operating in the fields of artificial intelligence, big data and analytics, blockchain, cybersecurity, fintech and IoT, and other business areas. Through our investment arm, GO Ventures, we have invested over €1 million in local and foreign start-ups that have used digital means to innovate and disrupt the markets, since its inception in April 2019. Our investment goes beyond financial. We have invested time, resources and expertise to help these start-ups grow.
2021 was an important year for TV. We continued investing in our platform, improved the TV interface but more importantly we contributed greatly to local TV content by committing €1 million to be used in productions that are exclusive to GO customers. This is a first for GO, and a milestone for the industry, through which local talent is being supported, and customers get to enjoy a fully-fledged library of local content that they love.  The first production, Chalet, began broadcasting in December 2021 and the feedback has been overwhelmingly positive.
Financial performance
Staying focused on living our purpose, and staying true to our values, has enabled us to deliver a strong financial performance and returns for our esteemed shareholders.
The Group generated revenue of €193.7 million (2020: €185.2 million), an increase of 4.6% over the comparative year. Driven by subscriber gains in both fixed broadband and mobile, our local telecommunications revenue increased by €0.9 million, compensating in part for lower levels of international roaming revenues resulting from travel restrictions.
2021 was an equally positive year for our operating subsidiaries. BMITT’s total revenues reached €25.3 million, an increase of 5.5% over 2020. While consolidating its market leading position in data centre operations, BMITT has also been successful in growing ancillary revenue streams such as cloud services, managed services and provision of hardware and software solutions which have collectively grown by 23.5% in 2021.
GO p.l.c.
Annual Financial Report and Consolidated Financial Statements - 31 December 2021
Chief Executive Officer’s review - continued
Cablenet continues with its rapid growth. The company has consistently delivered double-digit growth in subscribers and revenues since 2018, and in 2021, propelled by the launch of its hugely popular Purple Max postpaid mobile plans, total revenue reached an all-time high of €53.5 million, an increase of 13.9% over 2020.
The current international economic and political climate, and the ever-present threat of the pandemic, continue to fuel cost inflation and operational complexity. Throughout 2021, we kept tight cost discipline and took various measures to limit the impact of this cost inflation. This enabled us to continue offering cutting-edge products and the best possible service to our loyal customers, in a sustainable fashion, while safeguarding profitability and shareholder returns.
Group profit for the year amounted to €10.4 million, a reduction of €3.6 million compared to the prior year, which is mainly attributable to a one-off gain on investment of €3.1 million realised in 2020. Earnings per share amount to €0.098 (2020: €0.133).
At GO we remain focused on investing for the long term, while providing healthy returns to our shareholders. It gives me great pride that in addition to the interim dividend of €0.07 per share paid on 31st August 2021, the Board is proposing a final dividend of €0.09 per share, thus bringing the total dividends distributions for financial year 2021 to €0.16 per share.
Looking forward
Environmental sustainability is influencing both business strategy and consumer purchasing decisions across the globe. Attitudes towards climate change, increased awareness and a deep-set need for real change is pushing companies to take tangible action to reduce their impact on the environment. We have measured our carbon footprint and have a strategy in place to significantly reduce our environmental impact over the next five years. We are investing heavily in solar energy at our new headquarters in Zejtun and will be transitioning to an electrical fleet by 2023. We have taken tangible action internally to reduce our carbon footprint, which in turn, helps our customers reduce theirs. We are confident that they will reward us with their loyalty.
Going forward, our focus remains the same. We shall continue supporting our people internally, nurturing a culture that is fully supportive of us becoming a purpose led organisation; shall continue investing in innovative products and services through the best technology available in order to continue enabling our customers’ lives and businesses; and shall continue to do our part in reducing our environmental impact.
As a Company, we could not have delivered such promising results if it was not for a Board that directs us and supports our vision, and an exceptional team that leads this Company so enthusiastically, even when the going gets tough. I would like to take this opportunity to thank you, our esteemed shareholders for your trust; my colleagues for their unwavering dedication; and to salute our dear colleague, Steve Sargent, the architect behind our True Fibre network, who passed away suddenly earlier this year.
Signed by Nikhil Patil (Chief Executive Officer) on 30 March 2022
GO p.l.c.
Annual Financial Report and Consolidated Financial Statements - 31 December 2021
Directors’ report
The Directors are pleased to present their report together with the financial statements of the Company for the year ended on 31 December 2021.
Principal activities
GO is a leading integrated 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.
The Group also has a controlling interest in Cablenet Communications Systems p.l.c. (Cablenet), a leading provider of high-speed broadband, TV and fixed-line telephony services to personal and business clients in Cyprus.
Business review
A review of the business of the Group during the year under review, events which took place since the end of the accounting period and an indication of likely future developments are given in the Chief Executive Officer’s Review on pages 1 to 3.
Review of financial performance
2021 was expected to be a year of gradual adjustment following the unexpected global economic, political, and social turmoil brought about by the pandemic in 2020. The gradual lifting of international travel restrictions has helped to improve the appetite of people to travel, however the situation during 2021 remained very challenging particularly in view of new variants of the virus that emerged throughout the year and the threat of other variants to come.
Against this backdrop, it is encouraging to note that thanks to the loyalty of our esteemed customers, the Group achieved significant growth across all business segments and delivered robust levels of revenues, profitability, and cash generation. All of these are testament to the solidity of our business model and the exceptional work and commitment of our people.
The extended impacts of the pandemic fuelled further growth in the demand for fixed and mobile telecommunication services. As confirmed by the latest quarterly review report published by the Malta Communications Authority, GO achieved the highest levels of subscriber growth on fixed broadband, with 48.3% of total market growth, as well as Mobile with 75.4% of total market growth cementing GO’s lead position in the Mobile market segment. The aforementioned growth in local telecommunication services revenue compensated in part for a significant reduction in roaming and other international wholesale revenues which remain under pressure mainly due to travel restrictions. In total, revenue from GO’s local telecommunications segment increased by 0.7% compared to 2020.