Three Ireland cost-cutting plan delivers 8% earnings growth

Mobile phone operator Three Ireland offset a 5 per cent fall in its revenues last year by cost-cutting, to deliver 8 per cent growth in its earnings to €188 million, according to annual results issued by its Hong Kong parent, CK Hutchison.

Total revenues at the Irish unit slipped from €689 million to €655 million, which the company partially attributed to a cap on European Union roaming charges that came into effect last April.

The company, which bought O2 brand in Ireland in 2014 for €850 million, continued to boost its active subscriber base, which rose by 2 per cent to almost 2.1 million. Prepaid active subscribers slipped marginally to 888,000, but the more lucrative postpay segment increased by 3 per cent to more than 1.18 million.

Arpu

Net arpu (average revenue per user – a standard industry performance metric) fell by 9 per cent overall, when prepay and postpay are blended. The average across the brand’s European operations was 10 per cent.

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Prepay arpu at Three Ireland was €15.92 per month, while postpay customers each delivered net average revenue of €24.19 to the group.

Three said the cost savings were attributable to synergies from the ongoing integration of the old O2 base into the 3 group.

The company invested €103 million during 2016 on capital expenditure such as system and network upgrades. This compares to similar investment of €132 million in 2015.

Revenue dip

In comments provided to

The Irish Times

by local management, following the results’ publication in Hong Kong, the company shrugged off the revenue dip and insisted the results were “a very positive performance for the business in 2016”.

It said it anticipates “growing” its financial performance this year.

In addition to the mobile operator, CK Hutchison also owns the Superdrug and Perfume Shop retail chains that operate in Ireland and abroad.