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3 Ireland: EUR82m loss in 2008 brings total losses to EUR270m

27 Oct 2009

Hutchison Whampoa’s Irish 3G mobile operator 3 Ireland has accrued losses of more than EUR270 million (USD404 million), having racked up further losses of EUR82 million in 2008. In a filing with the Republic’s Companies Office, 3 Ireland’s financial position was put squarely in the frame, although a spokeswoman for the operator last night stressed the firm was ‘pleased’ with its progress in the domestic market, noting that ‘A huge amount of investment goes into building a network and infrastructure, we’re still in the investment phase and all that investment is going to plan.’

The Irish Independent newspaper adds that 3 declined to comment on when this investment phase would be finished but market sources expect the firm to reach break-even within the next two years. The Hutchison Whampoa unit has been in Ireland since 2005 and aims to reach the 500,000 subscriber mark by late 2009 or early 2010. It is also engaged in rolling out the government’s national broadband scheme as well as selling its own 3G broadband dongles. However, the operator’s latest accounts show that revenues in 2008 totalled EUR70 million, up 45% year-on-year but that gross profits failed to keep pace, falling to EUR25.3 million compared with EUR28 million in 2007. Moreover the gross margin contracted sharply from 58% to 36% which the firm attributed to a changing product mix. 3 also reported a EUR22 million reduction in ‘selling and administration expenses’ to EUR81.8 million in 2008, which helped the company to trim operating losses from EUR75.6 million in 2007 to EUR56.9 million in 2008. Much of the improvements in costs were offset by a 50% hike in interest charges to EUR30.35 million, pushing pre-tax losses to EUR86.4 million against EUR95.6 million in 2007.

Ireland, Hutchison 3G Ireland (Three Ireland)

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