Eircom reports rising losses in year to 30 June 2014 on restructuring costs

29 Aug 2014

Ireland’s Eircom has reported its full year and fourth quarter results to 30 June 2014, noting that whilst the group’s financial performance ‘continues to stablise’ (it now reports eight consecutive quarters of EBITDA stability), its losses reached EUR333 million (USD439.3 million) as a result of costs related to its ongoing restructuring programme. The carrier said it booked exceptional charges of EUR235 million in the year to June, mainly to cover redundancy costs and monies set aside for a defined benefit pension scheme. Losses in the previous financial year were EUR117 million, including an exceptional charge of EUR22 million. Full-year revenue of EUR1.28 billion was down 6% year-on-year and EBITDA fell 1% to EUR479 million in a period in which Eircom was forced to book a one-off cost of EUR10 million to cover repair costs to its network following storms earlier in the year. Operating costs were EUR814 million for the year, a EUR87 million or 10% improvement on the year to 30 June 2013.

Commenting on the announcement, Herb Hribar, CEO of Eircom Group, said: ‘The past twelve months underline real and sustained progress in the transformation of Eircom both in our financial performance and our product offerings to our customers. We have now had eight consecutive quarters of EBITDA stability, slowing decline in our revenues and an improved cost base … Network investment continues at pace both in our fixed and mobile platforms. We were the first to market with a quadruple play bundle of services including our new eVision TV offering and the first to market with 4G mobile services … Our rollout of Ireland’s largest fibre network, which already reaches more than 900,000 homes and businesses, remains on schedule and on budget – demonstrating that Eircom has the expertise to build a fit for purpose, scalable and future proofed network throughout Ireland. Today we are accelerating our rollout and now expect to reach 1.4 million premises by December 2015 … I am also delighted to announce that our ambition for the delivery of high speed broadband services across Ireland will take us further with an additional investment commitment over the coming two years. This includes the deployment of fibre-to-the-home [FTTH] technology, supporting symmetrical speeds of up to 1Gbps to locations in Ireland where we see demand emerging. In addition, we are expanding the overall fibre footprint to 1.6 million premises, ensuring more customers across Ireland will be able to avail of fibre broadband. Our rollout should be completed by December 2016.’

Operationally, Eircom’s total retail customer base, comprising fixed and mobile customers, stood at 1.899 million at 30 June 2014, including 1.055 million mobile customers. The total customer base including wholesale customers was 2.369 million at the same date with the telco noting that revenue generating units (RGUs) per customer improved from 1.59 to 1.77 during the past twelve months. Fixed line revenue declined 8% y-o-y to EUR980 million in the twelve months to end-June, corresponding to a 4.5% drop in fixed line EBITDA to EUR443 million, it said. Eircom closed out June with 718,000 broadband connections, up 7.5% for the year, including 133,000 fibre connections. Its retail division reported 456,000 broadband customers, a 1% increase on 30 June 2013, and wholesale broadband lines grew 44,000 or 20% during the year, to 262,000 lines.

In the mobile segment, Eircom reported that EBITDA more than doubled to EUR36 million in the year to 30 June 2014, although full-year revenue declined by 2% to EUR347 million. The Group’s mobile customer base remained stable at Q1 2014, at 1.055 million aided by 70,000 net additions in the higher value post-pay segment during the year. Contract users now account for 40% of the total mobile customer base, up from 33% previously. Finally, Eircom said that it now has more than 65,000 customers using its 4G network since its launch in September 2013, adding that 70% of all new post-pay sales have been on 4G price plans in recent months.

Ireland,Eircom, Meteor Mobile,

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