NTL Ireland, which provides television services in Dublin, Galway and Waterford, lost €28.3 million in 2002 despite significantly increasing its turnover.

The cable firm's pre-tax losses rose from €24.3 million in 2001, a year when NTL Ireland halted the upgrade of its network when it ran out of cash.

A sharp increase in operating expenses, which rose to €118.8 million in 2002 from €89.4 million in 2001, was responsible for the widening losses. Exceptional charges of €10.5 million for redundancy payments and impairment on property are detailed in NTL Ireland's latest financial accounts, filed with the Company's Registration Office.

Mr Graham Sutherland, NTL Ireland's managing director, described the 2002 results as disappointing but said the firm had made a lot of progress since then.

"We are driving very hard in 2003 to make a profit," he said. "We are generating real cash flow and this is important because investment depends on this."

The poor financial performance of NTL Ireland underlines just how difficult it will be for its parent to get a return from its purchase of Cablelink from Eircom and RTÉ in 1999 for €679 million.

Turnover at NTL Ireland, a subsidiary of US firm NTL which recently emerged from Chapter 11 bankruptcy protection, rose to €95.2 million in 2002, up from €69.6 million during 2001.

This was boosted by decisions of the telecoms regulator to sanction increases in cable television charges in 2002 and the migration of some NTL Ireland users to its digital television platform.

Mr Sutherland, who joined the firm in the fourth quarter of 2002, said a strong performance from NTL Ireland's business operations also contributed to this increase in turnover.

Reflecting the firm's concentration on reducing its cost base, NTL Ireland slashed its capital expenditure to €24.6 million in 2002, down from €42.6 million in the previous year. It also received just €3.2 million in 2002 from related companies, down from the €73.3 million in 2001.

NTL Ireland carried forward a loss of €36.5 million from 2002, up from €8.08 million in 2001. Net debt was €110.6 million in 2002, down from €112.7 million.

Staff costs fell to €19.5 million during 2002, down from €20.2 million following its redundancy programme during the year.

NTL recently said it would restart upgrading its network to enable it to offer high-speed internet services to more users.