Esat BT posts loss of €27m in first half

Fixed-line operator Esat BT posted a net loss of €27 million in its first half, but predicted yesterday that it will break even by the end of its fiscal year.

The company announced that revenues for the six months to the end of September (the first half of its financial year) grew 25 per cent to €173 million from €138 during the same period in 2003.

Earnings before interest, tax and charges for depreciation and amortisation were up 12 per cent to €13 million.

The company made a net loss during the period of €27 million, an 18 per reduction on last year's first-half losses of €33 million.

Chief executive Mr Bill Murphy told The Irish Times yesterday that the company was in the middle of a three-year "turn around" plan designed to bring it to profitability.

He predicted that the company would break even by the end of its fiscal year in March.

"We should end the year at that level and hopefully break into profitability next year," he said.

The company had losses of €500 million four years ago.

"It's still a very challenging market," he warned. "My view is that this industry and the related information technology industry are going to go through a period of consolidation over the next 12 months and only the companies that are growing are going to survive."

Esat is the second biggest fixed-line player in the Republic after Eircom and targets both corporate and domestic users.

Mr Murphy said yesterday that its revenues were split roughly 50/50 between voice and data services (that is, the internet and email).

In a statement, the company said that it had signed up a number of significant corporate customers during the first half.

These included Bank of Scotland, Barclaycard and Brown Thomas, the retail chain.

Mr Murphy said that the renewal of the Government's €30 million exclusive internet and data contract next year would provide the company with "exciting opportunities in the public sector".

Eircom currently holds the contract, which the Government renewed for a year last July.

Mr Murphy singled out the development of broadband, voice over internet technology and mobility as primary focuses for growth next year.

Its parent, the UK-based BT Group reported that second-quarter earnings before charges for exceptional items and amortisation grew 4 per cent to €783.4 million from €753.5 million during the same period in 2003.

Revenues grew 1 per cent to €6.6 billion.