eircom Announces Second Quarter and Half Year Results To 31 December 2012
Performance in line with expectations
Fibre Network extended to reach 60% of country
Group revenue down 6%
Operating costs fall 7%
EBITDA down 8%
Total customer base of 2,442,000
eircom Group today announced results for the half year and second quarter of the financial year through 31 December 2012.
Commenting on today’s announcements, Herb Hribar, CEO eircom Group, said “The business continues to perform in line with expectations as we make progress to stem our customer losses, revenue decline and profitability erosion.
“We are fully committed to our investment strategy to construct a network for the nation that supports the seamless delivery of new and innovative products and services for consumers, small businesses and large enterprises across fixed and mobile platforms.
“I am delighted to announce that today we are expanding the reach of what will be Ireland’s largest fibre network from one million to 1.2 million homes and businesses. This incorporates a further additional 78 communities throughout the country and when completed, will provide high speed broadband connections to 60% of homes and businesses in Ireland.
“The fibre broadband network has already passed more than 230,000 premises and high speed broadband services will launch later this spring. We will also trial high speed 4G data services in the coming months and anticipate a commercial offering this summer.
“Operating costs have reduced in the first half of the financial year and we have made solid progress to reach our two year goal to reduce staff levels by 2,000. By next week, more than 600 staff will have left the business during this financial year, and we remain fully committed to our cost reduction targets.”
Revenue for the second quarter through 31 December 2012 declined to €361 million, down €23m or 6% on the corresponding quarter in the previous year. Operating costs were €157m for the quarter, a 7% improvement on the prior year, demonstrating the continued focus on costs savings. Despite these savings, EBITDA decreased by €10 million on the prior year to €119 million for the quarter, down 8% on the same period in 2011. The retail customer base stood at 2,050,000 at 31 December 2012 and includes 1,086,000 mobile customers. The total customer base including wholesale customers is 2,442,000 at 31 December 2012.
In the fixed line segment, revenues fell 7% for the quarter which was reflected in a corresponding 12% decline in fixed line EBITDA compared to the previous year.
In the broadband market, eircom gained 2,000 retail broadband customers for the quarter through 31 December 2012, resulting in 461,000 customers, a 1% improvement on its customer base since 30 September 2012. This is the first quarter of growth in broadband customers for the past seven quarters. The PSTN customer base fell to 964,000, a reduction of 15,000 customers in the quarter, which slowed from 19,000 losses in the previous quarter.
In the mobile segment, the Group’s customers grew by 1% in the quarter to 1,086,000 through the end of December. This was largely driven by continued post-pay growth that resulted in 40,000 net mobile additions for the half year. Mobile revenues continued to decline by 5% for the quarter but mobile EBITDA grew by €2m compared to the corresponding period in the previous year.
Commenting on the results, CFO Richard Moat said, “We are making progress to slow our revenue decline and stabilise our overall customer base. Fixed line customer losses are reducing and we continue to outperform the market in the post-pay mobile segment through improved value offerings. In addition, we are making steady progress on our €100m cost reduction programme. This improved competitiveness will maintain earnings and together with the investments we are making in a compelling network proposition in fibre and 4G high speed broadband services, we will offer greater value to customers.”