Maltacom’s profits at Lm13.5m, but Vodafone divestiture still a thorn in the side

By Matthew Vella

A sober reminder of a sour quest. Maltacom’s ongoing divestiture of its twenty per cent stake in Vodafone Malta was yesterday a cause of concern for Chairman Maurice Zarb Adami in his concluding remarks for Maltacom’s 2002 final accounts:
"We have to get rid of the Vodafone shares to be able to dedicate more time and resources to the Maltacom Group’s activities. It has cost us quite a bit of money and executive time. We should be giving more attention to our core business."
With BOV consultants and NM Rothschild aiding Maltacom in its sale of the shareholding, the Group’s recent attempts to dispose of its shares over the past year have proved to be somewhat problematic.
A lot of interest was created when Maltacom placed an international call for non-binding expressions of interest in the foreign media, with 26 offers received at its offices.
Investors were, however, scared off the proposal when they saw there was no exit option for the investment and due to limited shareholding. Speaking to The Malta Financial and Business Times, CEO Stephen Muscat said Maltacom group had now entered into direct discussions with Vodafone abroad (see interview on page 11):
"Since according to current legislation every licensed operator has to be listed on the Malta Stock Exchange, we are now in the stage of seeing Vodafone Malta Ltd being listed on the MSE. This includes a mandatory sale of at least 20 per cent of its shares.
"This has to be proportionate, and this will include a part of our shares and a part of Vodafone abroad. That would be the opportunity to invest our shares and we are insisting on a fair price for these shares, calculated in terms of today’s and tomorrow’s market."

Maltacom’s executives yesterday unveiled 2002’s financial results, with pre-tax profits increasing by 2.7 per cent to Lm13.5 million. Muscat said this had been possible though efforts in directing expenditure towards the achievement of targeted efficiency levels.
The increase in profits have generated a return of 20.6 per cent on the average shareholder’s funds, down 1.8 per cent from 2001, and a return of 11.2 per cent on average total assets, down 0.8 per cent from 2001.
EBITDA was also up by 5.3 per cent to Lm21.8 million.
Earnings per share for Maltacom Group in 2002 amounted to 9c5, an increase in 0.3c from 2001, but the company itself saw EPS fall from 11c5 in 2001 to 9c5.
Group Finance Director Edgar Borg yesterday said that whilst economic growth in 2001 had been of one per cent, Maltacom’s 2002 performance had been an impressive one. Turnover for the group had increased by Lm3.8 million to Lm54.6 million, with major growth areas delivering satisfactory results. Its mobile telephony subsidiary Go Mobile had reached an active subscriber base of over 110,000, with 40 per cent of the market share. Cellular traffic revenue increased by 30.8 per cent, described by the group as having exceeded expectations. Income from internet-related services increased by 68.1 per cent.
In other areas however, rental income had decreased by five per cent and international calls revenue had decreased by 11 per cent. Domestic fixed line traffic revenue also decreased by 3.2 per cent.
CEO Stephen Muscat however said the difference in revenues had been complementary in the wake of an ‘explosive’ internet market and the increased use of mobile telephony.
Zarb Adami said the results had been obtained "in spite of the adverse global economic pressures in the past two years. The results achieved so far will be consolidated to increase shareholders’ asset value and group profits. As we face the newly liberalised scenario we shall do our utmost to achieve continuous growth, strengthening and diversifying Maltacom."