eircom posts 2Q and 1H results to 31 December 2008

27 Feb 2009

Ireland’s former monopoly fixed line operator eircom today published its second-quarter and half-year financial results for the period to 31 December, saying that the deteriorating economic environment has impacted the group’s 1H performance, reflected in a fall in subscribers and traffic volumes, lower prices and an erosion of EBITDA. Group revenue for the six months under review was EUR1.03 billion (USD1.31 billion), broadly the same as the corresponding six months for the previous financial year, although EBITDA was down 4% year-on-year to EUR333 million. CAPEX for the first six months of the financial year was EUR197 million, eircom said in a statement, part of the approximately EUR900 million capital expenditure spent in the past two and a half years.

In the fixed line segment, eircom said it added a net 46,000 DSL broadband subscribers to 639,000 in the six months to 31 December, down 42% from 79,000 net additions in the same period of FY2007/08, while the number of retail telephony customers leaving the operator reached 41,000 compared with 8,000 previously. The group’s mobile arm Meteor generated revenues (before intra-company eliminations) of EUR255 million in 1H2008/09, up 7% on the corresponding period a year ago, and mobile EBITDA was EUR57 million, up 6% year-on-year. Although mobile subscriber growth was down 44% year-on-year at 49,000 in the period, the operator said its continued increases in market share reflect the ‘compelling value to customers of Meteor’s products and services.’ As at 31 December 2008, the cellco had a total of 1.032 million subscribers, of which 131,000 were post-paid customers (up 13% y-o-y). Meteor is progressing to roll out of its 3G mobile data network in the Republic and says the commercial launch of Meteor’s 3G services will take place in the greater Dublin and Cork areas next week – with major towns across the country being added during 2009. In addition, eircom says its DSL broadband services are now available on more than 1.4 million of its telephone lines, and that 245,000 retail broadband customers are now enjoying a 3Mbps or faster service following a recent network upgrade.

Commenting on the group’s financial performance Cathal Magee, acting CEO, said: ‘Despite the deepening economic crisis and the pressures that this will bring for our business, we are confident that eircom has the scale, resilience and depth of capabilities to offer our customers competitive products and services over the highest quality fixed and mobile networks. The investment we have made over the past few years will serve us well. We now need to focus on reducing our cost base to underpin our competitiveness going forward in these difficult economic conditions.’

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