Growth in its broadband service and a solid performance in its other businesses helped Eircom to report second-quarter earnings of €149 million, broadly in line with expectations.
Although EBITDA (earnings before interest, tax, depreciation and amortisation) was 1 per cent below the €150 million posted a year earlier, revenues were up by 1 per cent to €403 million.
This resulted in first-half EBITDA of €298 million and revenues of €802 million.
Eircom, which is currently the focus of a takeover approach from Swisscom, said it would pay an interim dividend of five cent per share. This will be worth around €10 million to the Employee Share Ownership Trust (ESOT), which controls nearly 22 per cent of the company.
Chief executive Philip Nolan described the first half as "very good for us in a strategic sense. We made a lot of progress on things that are important to us".
In addition to its acquisition of mobile phone operator, Meteor, the company continued the rollout of its broadband service.
Eircom had signed up 164,000 broadband subscribers by September 30th, the end of the second quarter, and 184,000 subscribers as of November 10th, giving it a 78 per cent share of the retail market. The company continues to target 500,000 subscribers by the end of 2007.
Meanwhile, Meteor continued to trade in line with expectations, Eircom said. In the three months to the end of September, it had revenues of €44 million.
Dr Nolan said Eircom was still waiting for the Competition Authority to clear the acquisition. If the deal is passed, the company should know by the end of November but if the Authority decides to take a closer look, approval could be delayed until spring next year. Eircom has also made its submission for a 3G licence and expects to hear the outcome by the end of November.
A breakdown of second-quarter revenues shows that a 9 per cent drop in revenue from voice and data traffic to €148 million was offset by an 8 per cent increase in revenue from rental and connections to €149 million and a 24 per cent increase in revenues from interconnect services to €48 million.
At the end of the second quarter, Eircom's headcount had fallen to 7,250 from 7,725 the previous year and the company anticipated shedding a further 400 jobs by the end of its financial year.
Capital expenditure in the first-half totalled €115 million with the company expecting to spend €220 million in the full-year.
Shares in Eircom slipped by two cent to €2.27 yesterday but dealers put this down to a poor performance by the sector.
The company declined to make any comment on the Swisscom bid.
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