31 May - 6 June 2001

Maltacom reports 9.6 per cent drop in profit after tax

by Ivan Brincat

Maltacom plc has posted a pre-tax profit of Lm2.6 million for the first quarter of this year, however profit after tax was down by 9.6 per cent to Lm2 million.
Turnover in the company increased by 9.2 per cent to Lm11.6 million over the same quarter ending 31 March 2000.
The main drivers behind the revenue growth are an increased subscriber base in both telephony and internet, increased usage of mobile telephony and the continuous expansion of subsidiary companies which contributed substantially to the Group’s turnover for the current quarter.
Domestic mobile interconnection traffic increased by about 68 per cent and international interconnection traffic increased by over 70 per cent. This was mainly due to the increase in the mobile operators’ subscribers base mainly arising from pre-paid cards and services.
The company, however, reported a 9.6 per cent decrease in profits to Lm2 million and this is mainly due to the forthcoming sale of its 20 per cent stake in Vodafone shares. The revenue from these shares was not included in the results due to a different accounting procedure.
Among the main developments in this quarter was Maltacom’s bid as part of the consortium e-island partnering Public Warehousing Corporation, Microsoft, Maltapost, KPMG and, Demajo Group of Companies for the call for a strategic partner by the government of Malta for the e-government project.
Go Mobile increased its international roaming agreements while the company also launched secure e-commerce facilities jointly with BOV.
Efficiency levels increased over the period with revenue per employee growing by 5.5 per cent from Lm7,089 to Lm7,478 and lines per employee increasing from 133 to 143.
The financial director of the company Edgar Borg said the group was also successful in maintaining an aggressive stance on its credit control. The average credit control period for the company has been retained at a healthy 67 days.
Mr Borg said that despite the advantageous interest rates that were successfully negotiated with the providers of loan and working capital finance, a fall in local interest rates in general and the implementation of certain treasury management policies, the Group’s exposure to third party financing has increased. This was due to the significant expansion at Go Mobile.
Maltacom said that in light of the further liberalisation of the local telecommunications sector, including the fixed line network, the Group expects the competitive pressure to persist and intensify.