Eircom revenues and profits slump in year to end-June

19 Oct 2012

Irish former monopoly Eircom, which successfully exited examinership status in June this year with a new shareholder structure and with 40% of its debts wiped out, has reported a sharp fall in revenue and net income for the twelve months to 30 June 2012, as it continues to struggle in a competitive domestic fixed line and broadband market. The telco booked turnover of EUR1.515 billion (USD1.985 billion) in the year under review, down 10% on an annualised basis, while earnings before interest, tax, depreciation and amortisation (EBITDA) slumped by 16% to EUR542 million. The falls were despite Eircom making annualised savings of EUR69 million, equivalent to around 7% year-on-year.

Eircom’s recently appointed chief executive officer, Herb Hriber, put a brave face on the results though, telling The Irish Time that his company had lost ‘almost zero’ subscribers as a result of the uncertainty surrounding its journey through examinership. ‘I don’t think from what I see that we lost a significant amount of customers,’ he claimed, going on to say that the carrier was in ‘good shape’ and now able to manage the EUR2.35 billion of gross debt it has.

The group’s fixed line business reported a 10% y-o-y decline in revenues however, and EBITDA for the unit was down by 9%. In terms of broadband users, Eircom lost a net 24,000 retail customers in the period under review, or 5%, for 461,000 connections at end-June. The company also reported a 4% rise in mobile users to 1.076 million, but noted that revenues derived from cellular activities continued to fall in line with market trends. The rise in the overall base was driven by post-pay take-up, which resulted in 40,000 net additions and a 5% improvement in the group’s mix of mobile customers. Eircom also reported that smartphones now account for 37% of the total user base. The telco operates two mobile phone brands in the Republic – Meteor and eMobile.

Finally, the struggling operator announced the next stages of its EUR400 million fibre-optic rollout, which will see it add a further 50 locations in 22 counties to its footprint. This will pass an additional 350,000 households and businesses it said, and work will start next spring, with the construction phase set to finish by the end of 2013.

Ireland, eir