Eircom reports 10 per cent fall in revenue

Eircom has reported a 10 per cent fall in revenue for the three months to the end of March.

Earnings before interest, tax and depreciation declined by 11 per cent to €122 million for the quarter, despite a €7 million drop in operating costs to €153 million.

Revenues for the fixed landline segment fell by 11 per cent in the quarter to €267 million, resulting in a 12 per cent decline in earnings to €116 million compared to the same period last year.

The company had a total of 2.4 million customers at the end of March, with the number of broadband customers falling by 1 per cent to 455,000 since the end of December 2012.

The company also saw mobile customers decrease by 2 per cent to 940,000 in the quarter, but the number of post-pay customers increased by 15,000.

Mobile revenues fell by 6 per cent, but earnings in the sector overall grew by €5 million.

Commenting on the announcement, Eircom chief executive Herb Hribar said trading performance has continued "in line with expectations".

“Trading conditions remain challenging due to increased competition and the macro-economic environment,” he added.

Since April, the company has introduced a fibre broadband network and eFibre, which claims to offer customers broadband speeds of up to 70Mb per second. The network is available to more than 325,000 homes and businesses, which is expected to almost double by the end of the year.

Eircom's chief financial officer Richard Moat said the company had improved its capital structure by raising a €350 million senior bond, reducing the net debt and diversifying funding sources.

The company also sold the Eircom PhoneWatch household alarm business to the Sector Alarm Corporation of Norway in a deal worth an estimated €130 million.

“While revenues continue to decline, we are making progress to address the underlying fundamentals of the business,” Mr Moat said.

“We continue to outperform the market in the post-pay mobile segment, acquiring half of the total customers that join this segment of the market. In addition, our costs continue to decline, providing improved competitiveness and a compelling network proposition that will offer greater value to our customers.”