Eircom tight-lipped on likely takeover

EIRCOM refused to give any update, yesterday, on where the likely takeover by Singapore Technologies Telemedia (STT) currently stands, but did say that it remains on track to lower its annual operating costs by €130 million within two years.

Completion of the anticipated takeover of Eircom Holdings, the Australian-based 57% owner of Eircom, by STT was expected last week and then again, when that didn’t materialise, this week.

An Eircom spokesperson said yesterday, the matter remains “a shareholder issue”.

Instead, the former State-owned telco was more concerned with financial matters and its fourth-quarter and full-year figures for the three and 12 months to the end of June

New chief executive, Paul Donovan, called the performance — featuring a 3% decline in full-year revenue to €1.99 billion and a 1% fall in adjusted EBITDA to €692 million — “a robust set of results against the background of a challenging operating environment”.

“We’ve made good progress in reducing costs to offset steep revenue declines. In the fourth quarter, the group’s operating costs — before exceptional items and non-cash pension credit — were 9% better than last year,” Mr Donovan added.

Adjusted EBITDA was down by 2% year-on-year for the fourth quarter at €173m, with revenue down by 6% at €479m.

Meteor, the group’s mobile telephony network provider, was once again the stand-out performer; upping its full year EBITDA by 11% to €124m and full-year revenue by 3% to €496m.

In the fourth quarter, alone, Meteor’s revenue actually fell year-on-year by 2%, due to a dip in ARPU (average revenue per user) but its EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 13% to €35m.

Meteor’s customer numbers grew by 38,000 in the year, to top the one million mark and Eircom’s broadband customer numbersalso grew by 72,000 to 665,000.

Said Mr Donovan: “The economic environment is challenging, with the continuing slowdown in activity impacting both volumes and revenues. Customer growth and retention remain key objectives for the business, which we expect to achieve through increased value and service.”

Eircom invested €335m in its business during the year and said that it will continue to invest in its broadband and 3G activities, with cash generation remaining strong.

“Our cash balance stood at €333m at the end of June. We’ve made good progress on de-leveraging, reducing our net debt by €182m during the year and by €387m in the past two years,” added Mr Donovan.