Eircom to revise cuts after poor results

EIRCOM is to reassess its current cost-cutting programme in light of a poor trading performance for the six months to the end of December — the first half of its financial year.

The company’s revenue fell by €3 million — on a year-on-year basis — to €517m for the second quarter and was flat at €1.03bn for the first half, as a whole. For the first six months, group EBITDA (earnings before interest, tax, depreciation and amortisation) were down by 4% to €333m, while fixed-line revenue fell by 3%, on the same period last year, to €806m.

Eircom did, however, enjoy a boost to its broadband subscriber base, which rose by 46,000 to 639,000 and its mobile phone network provision arm, Meteor enjoyed a 6% EBITDA rise to €57m and a 7% jump in revenue to €255m.

Meteor’s subscriber base also grew by 49,000people year-on-year to reach over one million.

Eircom is in the midst of cutting around 900 jobs from the group, over a three-year period, which started last year. To date, more than 600 of those jobs have gone. The company said yesterday it would be re-evaluating cost-cutting measures in light of the worsening economy and its deteriorating performance.

However, a spokesperson for the company said yesterday that there are a lot of ways costs could be lowered and that no definitive plan had been put in place — be it through pay freezes, wage cuts or further job losses.

He added that it had informed unions as to the situation and would be meeting with them to look at possible solutions.

The telecommunications company also announced that Cathal Magee, currently managing director of Eircom’s retail division, has been appointed acting group chief executive as a temporary replacement for Rex Comb, who recently announced his resignation.

Eircom also said that it will be taking “necessary steps” to remedy the situation with its defined benefit pension scheme, which has gone from a surplus of €422m at the end of 2007 to a deficit of €433m, as of the same date last year.