Eircom reports 9% fall in revenue

Eircom has today announced a 9% drop in group revenue in its results for the second quarter and six months ended December 31, 2009.

Group revenue was at €933m for the half year. Group Adjusted EBITDA at €327m was down 3% on last year.

Eircom’s operating costs were 13% lower than last year at €606m, reflecting reduced labour costs and other operating expenses.

Employee numbers were down 427 (6%) since December 2008.

Capital expenditure cash-flows for the six month period were €166m.

Fixed line revenue, before intra-company eliminations, of €723m, down 10%, as a result of lower PSTN and voice traffic volumes, as well as higher discounts resulting in lower net revenues.

DSL customers increased to 691,000 at December 31, 2009, up 52,000 from 639,000 at December 31, 2008. Retail DSL customers at December 31 2009 stood at 491,000, up 34,000 from December 31 2008.

Total PSTN lines at December 31, 2009 were 1,505,000, down 81,000 year-on-year.

Mobile revenue, before intra-company eliminations, of €239m, down 7% on the corresponding six months to December 2008, due to a decline in ARPU, partially offset by customer growth.

Mobile EBITDA of €51m for the six months to December 31, 2009, down 6% on the prior year.

Total Mobile customers of 1,086,000 as of December 31, 2009, up 46,000 from December 31, 2008, and up 60,000 from June 30, 2009.

Net cash inflow (before financing activities) of €8m in the six months ended December 31, 2009, compared with €128m in the six months ended December 31, 2008, reflecting the receipt in July 2008 of €124m in respect of a construction contract.

Net debt stood at €3.31bn at December 31, 2009 and cash on hand was €280m.

Commenting, Paul Donovan, CEO of eircom said: "The operating environment in Ireland has not improved.

"The group’s revenues remain under pressure and our profits have declined in the quarter despite continued good progress on costs. Further cost reduction will be required in the coming months.

"A number of very important corporate milestones have been reached, and key business issues addressed.

"In the past weeks, we have met two key objectives by achieving shareholder stability and agreeing a far-reaching remediation of our pension position with our unions. In addition, we now have more than 750,000 broadband customers on our networks."