Eircom revenues and costs diminish

Eircom has admitted that significant challenges remain in its efforts to turn around both its consumer and corporate divisions, but said it has made further progress on reducing its operating costs.

Yesterday, the former State-owned telecommunications company reported first quarter earnings before interest, tax, depreciation and amortisation (Ebitda) of €119m — in line with its own expectations but still down 1% on a year-on-year basis.

Group revenue for the three months to the end of September was €323m, representing a €32m or 9% decline on the same period last year, but operating costs were further reduced by 13%.

In September, when Eircom published its annual results for the 12 months to the end of June, which showed an 8% drop in revenue to €1.4bn, management said the business was ahead of schedule in terms of its long-term recovery plan, with the fourth quarter of the financial year representing the second consecutive three-month period of earnings growth.

On the back of yesterday’s first figures for the group’s new financial year, chief executive Herb Hribar said the performance shows continued stabilisation in the bottom line, with particular progress on cost reductions.

“However,” he added, “given the continued competitive intensity, significant challenges remain in our turnaround plans for both the consumer and business-to-business units.

“We’re committed to addressing these challenges in the coming months, by exploiting the new range of products and services now available.”

Management said yesterday that it remains on track to deliver €100m in operational cost savings by the fourth quarter of the current financial year. Between Oct 2012 and this time next year, 2,000 employees will have left.

Eircom — which attracted 8,000 new broadband customers during its latest quarter — has also revealed its intention to extend its fibre broadband offering to 1.4m homes and businesses.