Full year profits at Eircell rocket 318% to £25 million

Eircell's annual financial accounts, published nearly five months after the end of its financial year, have revealed a big jump in the company's profits in the year to April 1st.

The accounts of the mobile phone operator were released late yesterday and show that pre-tax profits at the company rose by 318 per cent to £25 million (€31.7 million) from £6 million a year earlier.

They also show that the company owes its parent, Telecom Eireann, nearly £73 million which has already prompted its main rival, Esat Digifone, to bring up the question of cross-subsidisation.

"We will be raising this issue with the regulator's office," an Esat Digifone spokesman said, pointing out that cross-subsidisation is prohibited under the new telecoms licensing regime that has been put in place.

However, Eircell points out that it paid an interest charge of £4.4 million on its debt and said the company operated very much on a stand alone basis, at arm's length from its parent.

"We have paid a significant amount of interest. We feel it's a fair number and fully disclosed in the accounts," Eircell's financial controller, Mr Niall O'Sullivan, said.

The company attributed the delay in publishing the accounts to the prohibition period for publication of price sensitive information which followed the Telecom Eireann flotation and ended in early August.

However, Eircell recently received a letter from the telecoms regulator requiring it to release the annual results. Ms Etain Doyle wrote to all licence holders drawing attention to their obligation to publish financial accounts in accordance with regulatory requirements.

"The publication of this information provides added transparency for consumers, raises the confidence of the industry and will further promote effective competition in the market place," she said.

Esat Digifone has already released results for the last financial year. Earlier this month, it published second-quarter figures showing a net profit of £356,000 in the three months to June 30th, revenues of £48.5 million and a subscriber base of more than 367,000. Last year, the company recorded an operating profit for the first time since its formation, with earnings before interest, tax and deprecation of £800,000 on sales of £117 million.

Eircell, which remains the largest mobile phone operator in the state, reported operating profits of £30.4 million on turnover of £270.5 million, a 29 per cent increase on the previous year.

It said it had enjoyed a highly successful year both in terms of profits earned and growth in its customer base, which increased by 55 per cent to 644,000. Ready To Go customers rose by 241 per cent.

The company was upbeat on the outlook for the sector going forward and confident that it would remain the dominant player in the market.

"Strong demand for mobile telecommunications is expected to continue for the foreseeable future," the annual report said. "Despite existing competition and the anticipated third entrant to the market, Eircell expects to continue to be the market leader in Ireland."

The annual report also revealed that total staff numbers increased to 593 from 313 a year earlier.