Last year was financially disappointing

Last year was financially disappointing – GT&T

May 12, 2009 News

…but income after taxation greater than 2007

The Guyana Telephone and Telegraph Company (GT&T), in its 2008 annual report, has described the previous year as a disappointment, financially.

According to the report, there was a significant overall eight percent decline in operating revenues compared to 2007, which led to a decline in operating income and pre-tax profits.

The report added that these declines were largely due to double-digit reductions in international inbound and international outbound traffic.

However, it noted that the balance sheet remains strong and the company continues to operate efficiently.

The report stated that the international outbound revenue was affected by the decision of the PUC to pull a promotion that the company launched on the international outbound service.

It said that in October the company was given permission by the PUC to run a promotion that offered huge discounts on international outbound calls.

The promotion was so designed that by the third month, the volumes would have started to make up for the losses of the first two months.

However, the report said, by the end of the second month, the PUC ordered the promotion to cease following a complaint from the competitor (Digicel).

“(GT&T) was thus frustrated in its attempt to create excitement and activity for its landline customers and find ways to generate enough local revenue to justify the rising costs (electricity, fuel, labor and materials) of maintaining the fibre-copper fixed line plant.”

The report also said that despite these financial challenges, the company continued to fulfill its social responsibilities.

Corporation Tax for the year was $3.2 billion while other tax obligations (approximately $225m) were fully met and did not include VAT and PAYE.

According to the report, the largest expenses continue to be electricity – approximately $700m for the year.

“If the company is not successful in recovering international revenue, or in generating greater revenues from local users, these figures will undoubtedly continue to fall.”

But the total operating expenses for 2008 — $12 B—declined over the 2007 — $13.1B.

This included the controversial advisory fee paid to ATN its parent company, which for 2007 was $1.2B as against $1.1B in 2008.

The total operating also recorded a decline over 2007. Last year the revenue was $19.3B as against $20.9B the previous year.

The bulk of revenue came from international long distance revenues, which amounted to $9.9B, less than the $10.1B the previous year.

Income after tax for 2008 was larger than in 2007 — $4.04 B as against $3,98 B.

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