Eircom denies AT&T talks as it announces 6% fall revenues
Rumours telcom giant discussed selling out to AT&T or Carlos Slim rejected
Operating costs at Eircom totalled €814 million for the year, up €87 million on the previous 12 months.
Eircom, which yesterday reported a six per cent drop in yearly revenues to €1.28 billion, has denied recent speculation that it held discussions over a potential sale with US company AT&T or Carlos Slim, the Mexican billionaire who owns America Movil.
“Those reports are inaccurate. We have not had an approach from AT&T and there also has been no approach from Carlos Slim,” said Richard Moat, Eircom’s chief financial officer.
Eircom, which is in the middle of a strategic review that could lead to a flotation or sale, said it is still on track to make an announcement over its future by the end of this year.
Mr Moat said the worsening climate in recent months for initial public offerings (IPOs) is “relevant” to its review, but insisted a final decision has not been made on whether to float or seek a buyer.
“There are other options to an IPO. It all depends on the financial performance of the business. If we do [go ahead with an IPO] our story will be one of stable results, significant capital investment and growth in parts of our business, such as broadband and television subscribers,” said Mr Moat.
Earnings before interest, taxes, depreciation, and amortisation (Ebitda) remained stable for the year to the end of June, down one per cent on the prior year to €479 million.
Redundancy costs and interest payments on its debt pushed the company into the red, however, as it posted a net loss before tax of €333 million.
It said its overall customer base, which includes wholesale customers, totalled 2,369,00, a drop of about 40,000 customers, with most of the losses in its mobile business.
Earnings from its mobile customers more than doubled to €36 million, representing a margin of 10.3 per cent. Mr Moat said the company was aiming to get this figure to “north of 20 per cent”, and it also increased the proportion of higher-value postpay customers.
Fixed-line revenues fell eight per cent to €980 million, which it said was reflected in a corresponding 4.5 per cent per cent decline in fixed-line earnings to €443 million.
Broadband connections rose by 7.5 per cent to 718,000, which included 133,000 high-speed fibre connections. Broadband lines in the company’s wholesale business grew 44,000 to 262,000 lines.
Eircom exceeded its annual cost savings target of €100 million by 10 per cent. Mr Moat said it would seek further annual reductions of €50 million over the next three years. “That will be mostly non-payroll related savings,” said Mr Moat.
He said the company hopes to return to revenue growth “soon”.
Eircom also announced an extension of its national fibre rollout. It remains on track to extend its fibre footprint to 1.4 million homes, and announced that a further 200,000 homes would be added during 2016.
The company said it will also offer higher-speed fibre-to-the-home services “as customer demand emerges”.