mmO2 makes profit debut

18 May 2004

UK based wireless group mmO2 has met forecasts with a 59% rise in full year earnings and a maiden tax profit of GBP95 million after goodwill and exceptionals. Earnings before interest, tax, depreciation and amortisation (EBITDA) for the year ended 31 March 2004 rose to GBP1.37 billion from GBP858 million in 2003, on the back of a 22% rise in revenue to GBP5.65 billion. Net debt during the year fell by GBP183 million to just GBP366 million, raising expectations that the group will announce a dividend payout in November.

According to CEO David Erskine all parts of the business met or exceeded the targets set out at the start of the year. Across the group more than 2.5 million customers were added, 54% of whom signed up for post-paid contracts. At the end of March the group claimed 20.7 million customers, an increase of 14% year on year. In the UK, O2 achieved 10% growth to take its customer base to 13.3 million, but with average revenues per user also rising by 10% to GBP272 a year, total revenues grew by 16% to GBP3.18 billion. O2 Germany, meanwhile, added nearly 1.2 million customers to its ranks to take its total to 5.98 million, 58% of whom were post-paid. In Ireland O2 reported an 11% increase in customers to 1.39 million, while Airwave – the group’s emergency services radio/phone system for the British Police Force – turned in its first profit before interest, tax and depreciation of GBP1 million. Airwave is now in use with 35 of the UK’s 53 police forces.

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