Meteor cites downturn as earnings drop by 19%

THE ECONOMIC downturn and intense competition in the mobile phone market contributed to a 19 per cent fall in earnings to €102 million at Eircom’s Meteor subsidiary last year.

The company’s revenues dropped by 6 per cent from €491.2 million to €458.1 million in the 12 months to the end of June last year, according to accounts just filed with the Companies Office by Meteor Mobile Communications Ltd.

The Eircom-owned company’s earnings before interest, tax, depreciation and amortisation dropped by €24 million last year to €102 million.

Pretax profits declined by 75 per cent from €37.2 million to €9 million. Combined non-cash costs such as amortisation and depreciation amounted to €89.2 million last year compared to €85.6 million in 2009.

Finance costs increasing by 14 per cent from €2.7 million to €3.1 million also hit pretax profits last year.

Profits were also hit by restructuring costs amounting to €1.4 million compared to €2.7 million the previous year.

The directors’ report attributes the 19 per cent drop in EBITDA “to the downturn in the general economic climate and the intense competition in the mobile market”.

The company achieved a 2.6 per cent growth in subscriber numbers during the year to 1,043,364 that included mobile broadband subscribers of 41,792 at June 30th, 2010.

“During the past 12 months, the company maintained its customer base and improved the coverage and capacity of its network, despite the general economic downturn,” according to the directors report.

The filings show the company’s operating costs, excluding amortisation, depreciation and restructuring, last year reduced from €362 million to €354.8 million.

The company’s operating costs did include an loss of €6.42 million for the impairment of trade receivables during the year – more than double the 2009 cost of €3 million.

Meteor was established in 2001 after securing the country’s third mobile phone licence and according to the latest figures from ComReg, Meteor’s share of subscriptions in the mobile phone market is at 20.2 per cent.

The €1.4 million in restructuring costs relates to the impact on Meteor of Eircom’s announcement in 2009 that it intended to cut 1,200 jobs in the group.

A note attached to the accounts state that the jobs will be cut through voluntary leaving, contractor reductions and natural turnover.

The numbers employed at the firm dropped during the year from 789 to 751 with staff costs reducing from €59.5 million to €48.1 million. A breakdown of the numbers employed show 339 were in sales and customer support, 307 in operations/technical and 121 in administration.

Meteor’s accounts show that last year’s after tax profits of €2.5 million helped reduce Meteor’s accumulated losses to €149 million. However, with a capital contribution of €365.6 million, the firm has equity of €217.2 million.

Three directors resigned during the year, Cathal Magee, Cliodhne Whelan and Larry Smith – Mr Magee left the company in February to take up the role of chief executive of the Health Service Executive (HSE).