Eircom posts €16m quarter loss

EIRCOM has posted a pre-tax loss of €16 million for the quarter to June, due to interest payments and a one-off charge.

Chief executive Philip Nolan said the results were solid and in line with the firm's plans. The figures are the first results since it returned to the stock market. Turnover for the period was down by 2% to €402m from the same period last year.

Operating profits dropped by around 50% to €17m, though this included a restructuring charge of €48m for a reduction of 400 in staff numbers. Without exceptionals for restructuring, operating profits close on doubled to €65m. The loss compares with a profit of €2m for the same period last year. The interest charge came in at €33m for the quarter, up from €32m last year.

Profit before tax and interest was €17m, compared to a profit of €34m for the corresponding period last year. The diluted loss per basic share was 3c, up from a loss of 2c last year.

Before restructuring costs jumped 86% to €65m, with operating margins up at 16% from 9% previously. Eircom also said it had spent over €57m on capital investment, sticking to its stated policy of Q1, reaffirming its target of €200m capital investment for the year. The €48m charge is the result of accelerated reorganisation within the group, which has always fallen behind its European counterparts on the number of workers per installed telephone line.

Commenting on the results, Eircom chief executive Dr Philip Nolan said: "We have announced a very solid set of results for quarter one, which are in line with our plans and expectations."

"Win a tough environment, we have grown profitability significantly, both at EBITDA and operating profit levels, and have continued capital investment at planned levels," he added.

He said the company's broadband rollout was "powering ahead" and Eircom was confident of reaching its target of 100,000 users by December 2004.

"Our Talktime bundled voice packages - a key element of core revenue defence - have proven popular. Take-up now stands at over 138,000 packages," he said.

"These results highlight the continued resilience of our business and our ability to compete and succeed in one of Europe's most competitive marketplaces," he added.

Last year Dr Nolan was paid €5.6m in salary and bonuses, the amount earned by him in successfully getting the firm back on the market after its reflotation by private investors, including Independent News & Media boss Tony O'Reilly. In Dublin the shares traded at between €1.47 and €1.55 and closed ahead at €1.49 yesterday evening.