eircom revenues up 21% in 1Q

4 Aug 2006

Ireland’s dominant fixed line and mobile operator eircom has reported a 21% rise in revenues from EUR399 million to EUR483 million (USD617.3 million) for the three months to 30 June 2006, the last set of financials under outgoing CEO Dr Philip Nolan. The firm posted a net loss of EUR0.10 per share in the quarter however, due to higher than expected financing charges for redeeming its debt. It recorded a profit of EUR0.07 per share in Q1 2005. The telco said EBITDA stood at EUR162 million (excluding one-off charges), up from EUR149 million a year ago, affected by the EUR420 million acquisition of mobile operator Meteor last year. The cellco generated revenues and EBITDA of EUR80 million and EUR13 million respectively in the first quarter – in line with expectations. At the end of June 2006 Meteor had 683,000 mobile subscribers, of which 57,000 were post-paid; it reported having 700,000 users a month later. Mobile monthly ARPU was EUR39.50. eircom also reported strong gains from broadband operations. It had 260,000 ADSL customers at the end of June, up from 141,000 in June 2005. The figure had risen to 274,000 by 31 July. Fixed line revenues climbed 4% to EUR415 million, with eircom ending the period under review with 228,000 PSTN and approximately 37,000 ISDN lines.

On 25 July eircom’s board accepted a takeover bid from Australian investment fund Babcock & Brown in an all-cash deal that values the operator at EUR2.4 billion (USD3.1 billion). Babcock & Brown will take on EUR3.8 billion in debt as part of the transaction, but has rejected accusations that this would handicap investment in infrastructure and services. Pierre Danon, the incoming chairman, said in an interview that the new owners would consider splitting up eircom into different units, ‘but for the time being we intend to run the company as an integrated company.’