Eircom reports 2Q09 and 6M09 results – revenues down

25 Feb 2010

Eircom today reported a 9% drop in group revenue for the second quarter and six months ended 31 December 2009. Consolidated revenue reached EUR933 million (USD1.26 billion) for the half-year period, while group adjusted EBITDA was down 3% year-on-year at EUR327 million. The operator said its operating costs for the period under review dipped 13% y-o-y however, to EUR606 million, largely as a result of a reduction in labour costs and other operating expenses; Eircom trimmed its workforce by 6% in 2009. Capital expenditure for the six months ended 31 December 2009 reached EUR166 million.

Eircom said fixed line revenues (before intra-company eliminations) stood at EUR723 million, down 10% y-o-y, on the back of lower PSTN and voice traffic volumes, and impacted by higher discounts it has been offering which led to a reduction in net revenues. Total PSTN lines in service stood at 1.505 million as at 31 December 2009, down 81,000 year-on-year. On a more positive note, Eircom said its xDSL subscriber base continues to grow. The number of high speed connections climbed to 691,000 by 31 December 2009, up 52,000 from 639,000 a year earlier. Of the total, 491,000 were retail DSL customers, up 34,000 in the same period

The group’s mobile arm Meteor reported revenues (before intra-company eliminations) of EUR239 million in the six months ended 31 December 2009, down 7% on the corresponding period of 2008, largely the result of a drop in monthly blended average revenue per user (ARPU), which was only partially mitigated by customer growth. The unit recorded 1.086 million mobile users at the end of 2009, up 46,000 from 31 December. Mobile EBITDA of EUR51 million for the six months ended 31 December 2009, was down 6% year-on-year.

‘The operating environment in Ireland has not improved,’Paul Donovan, CEO of Eircom said. ‘The group’s revenues remain under pressure and our profits have declined in the quarter despite continued good progress on costs. Further cost reduction will be required in the coming months … A number of very important corporate milestones have been reached, and key business issues addressed … In the past weeks, we have met two key objectives by achieving shareholder stability and agreeing a far-reaching remediation of our pension position with our unions. In addition, we now have more than 750,000 broadband customers on our networks.’

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