Losses mount at Irish telecom

Irish-headquartered telecommunications firm Imagine Communications posted a loss of almost €8.9m in 2013 — an increase on the previous year.

The firm was founded by telecom’s entrepreneur Sean Bolger. It saw losses mount on the back of lower revenues which fell by more than €7.5m in the year to the end of December 2013.

Administrative expenses — while slightly lower than those incurred the previous year — amounted to €21.6m while the company’s cost of sales fell to €24.7m from €30.7m in 2012.

Depreciation of fixed assets and amortisation of the company’s intangible assets amounted to more than €6.2m and contributed to the group’s operating loss.

Among the companies covered by the latest set of accounts filed with the Companies Registration Office are subsidiaries of Imagine Communications Group such as Imagine Broadband Services, Imagine Mobile, IBB Internet Services and Gaelic Telecom.

The company has substantial business operations across much of the continent including Ireland, the UK, Norway, Austria, the Netherlands as well as in the US.

In Ireland, Imagine provides fixed voice, broadband, IP and ISP services and is focused largely on the business sector but also provides services for residential customers through Imagine Gaelic Telecom.

The company’s accounts also refer to “a substantial claim for damages against a major supplier of technology, equipment and significant ancillary services” which relates to “material technical failures and under-performance on contractual arrangements”.

It goes on to warn that while the company is confident of a settlement in its favour, there is “inevitable uncertainty” with respect to the outcome which is likely to have a significant impact on the long-term future of the company.

In 2011, Imagine sued multinational telecoms giant, Motorola Ltd for more than €100m for alleged breach of agreements.

In its annual report, the company also outlines its satisfaction due to the fact that the group generated cash flow during the year despite the incurrence of significant legal and other professional fees associated with litigation.

Imagine’s payroll costs declined to just under €6.6m in 2013 — down from €7.4m the previous year. The number of employees fell from 188 to 181.

Directors’ remuneration remained unchanged from 2012 levels at €250,000.