eircom’s FY profits flat-line; talks with B&B continue

15 May 2006

Irish incumbent eircom reported pre-tax profits of EUR112 million (USD144.8 million) for the twelve months to the end of March 2006, up from EUR88 million in 2005 thanks to a one-off gain of EUR52 million from the sale of property, but underlying earnings were down 1% to EUR601 million due to a continued fall in its traditional landline business. eircom, which is in talks with Australian group Babcock & Brown and the employee share ownership trust (ESOT) over an expected takeover bid, posted full-year revenues of EUR1.7 billon, up 6% year-on-year, but underlying earnings were hit hard, as competition pushed up down revenues and increased sales and marketing costs. On a more positive note, eircom reported 250,000 broadband subscribers at the end of March 2006, up from around 100,000 a year earlier.

Profits at the operator’s fixed line business fell by 2% to EUR597 million, while its recently acquired mobile unit Meteor Mobile contributed profits of EUR4 million in the four-month period following its takeover. The cellco had 625,000 subscribers at the end of March, having added 60,000 in the final quarter of its fiscal year. It ended the period with a market share of around 15% and is on course to achieve its target of 20%, having invested EUR233 million in its network in 2005-06.

eircom said talks with Babcock & Brown and ESOT were on-going, and that a further announcement would be made in due course. A formal bid for the company is expected this week.

Ireland, eir