Eircom profits and revenues down – 1,500 headcount drop

31 Aug 2010

Eircom has reported that revenues have fallen 8.5pc year-on-year from €1.9m to €1.8m at the end of June. The company has warned about the challenges it faces returning to profitability and has reported 1,500 positions have been reduced over the year.

Fourth-quarter results show that revenues fell from €479m last year to €440m this year.

The company has made some headway in reducing costs with operating costs falling from €1.3bn in June last year to €1.1bn this year, an 11.2pc reduction.

Cashflow has improved from €84m last year to €127m this year.

Adjusted earnings before interest, tax, depreciation and amortisation were €669m, a 3.3pc reduction.

CEO Paul Donovan said the results highlight the work under way and the challenges the company faces returning to profitable growth.

“The results for the quarter and the year show sustained progress in cost reduction,” he said.

“Together with the introduction of STT as a new shareholder, the remediation of our pension scheme and the reorganisation of the group’s activities under a new management team, we have made important advances on a number of strategic fronts. But much more needs to be done as revenue pressures continue in a very challenging trading environment.”

He continued: “Our new management team has made a good start, reducing costs in the quarter by over 12pc year-on-year and holding EBITDA steady.  Our restructuring programmes have resulted in a reduction of more than 1,500 in headcount (including contractors) since March 2009, exceeding our target of 1,200 for March 2011.

“In addition, other cost measures have mitigated the impact of falling revenue on the group’s underlying profitability, and allowed us to begin to address our competitiveness,” Donovan said.

During the year, the company said it saw a reduction of 67,000 PSTN customers, 72,000 DSL customers and 38,000 mobile customers.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years