Eircom revenues rise slightly

15 Nov 2005

Eircom has reported a slight rise in revenues from €800m last year to €802m for the half-year ended 30 September. For the last quarter the company reported revenues of €403m, up from €399m a year ago. Eircom also revealed that as of 10 November, DSL customers increased to 184,000 customers.

The company reported earnings before interest, taxes, depreciation and amortization of €298m. It also said it made significant pre-tax profits on the disposal of properties of €47m.

Eircom said it spent more than €115m on capital expenditure during the half year with a focus on increasing capacity, demand-led growth and DSL rollout.

The half year was also marked by the fully subscribed rights issue of €423m that enabled Eircom to buy Meteor and return to the mobile market.

“In an increasingly competitive marketplace we have managed to slightly increase revenues, with our growth in broadband connections and interconnect traffic offsetting the global trend of declining voice minutes,” commented Eircom CEO Dr Philip Nolan.

“Customer satisfaction measures show a steady improvement quarter on quarter. The company’s drive for efficiency is reflected in the reduced headcount of 7,250 employees (down from 7,725 last year). Operating costs have been well controlled, although two items have caused costs to be above last year – the non-cash pension charges resulting from the previously reported pension deficit, and the outpayments associated with the sharp increase in interconnect traffic.

“The strong improvement in operating profit, €180m for the half-year compared to €89m in the same period last year, includes €47m profit from property disposals and a charge in the prior year period of €54m for redundancy programmes.

The company has increased its investment in the network with cash outflows from capital expenditure of €115m in the half-year compared to €96m in the same period last year. Growth in access channels is now a feature of Eircom’s performance, reflecting a greater intensity of marketing activity particularly for broadband. Finally, Meteor continues to trade in line with expectations,” Nolan said.

All eyes are on Eircom and its potential acquisition by SwissCom. Nolan didn’t shed much light on the ongoing negotiations except to say: “We have also confirmed an approach to the company that may or may not lead to an offer for the business. Subsequently SwissCom has confirmed that it has made this approach. We will not be commenting further on this issue at this time.”

By John Kennedy