Eir sales fall but results ‘in line with expectations’

Telecoms company sees earnings rise in third quarter on back of cost-cutting moves

During the third quarter, Eir spent €48 million on capital projects. Photograph: Maxwells

During the third quarter, Eir spent €48 million on capital projects. Photograph: Maxwells

 

Sales fell 2 per cent at Eir in the third quarter, the telecommunications company said on Wednesday, although it added that was due to a decline in fixed revenue which was in line with its expectations.

Revenue dipped to €310 million while earnings rose 7 per cent to €147 million in the three months to the end of March. The increase was attributed to a series of cost-cutting measures including “headcount reductions” and the move to bring its customer care functions back in house.

Eir said it saw “further solid growth” in key performance indicators as it improved the numbers subscribing to its television and sport business, fibre broadband and postpay customers.

Continuing on its cost-cutting mission, the company reduced operating costs by €19 million to €100 million compared with the same period in 2018 having completed its customer care insourcing programme.

“We continued to make substantial progress in the third quarter as we focused on our ongoing mobile and fibre infrastructure investments as well as on delivering real improvements for customers in the levels of service and care experience as we complete the transition to in-house customer service,” said Eir chief executive Carolan Lennon.

By the end of March, Eir had 1.03 million mobile customers and 941,000 broadband customers, a 2 per cent increase on the same period in 2018. However, of that figure, 464,000 were direct Eir broadband customers while the remainder were using the Eir network but subscribed to another provider. The company also improved Eir Sport subscriber numbers by 22 per cent to 304,000 but the vast majority of these are understood to be broadband subscribers who get the sport package free as part of their deal with Eir.

Capital projects

During the period Eir spent €48 million on capital projects as it builds out its fibre-to-the-home network to an additional 1.4 million premises across urban and suburban Ireland.

Ms Lennon said that Eir is the biggest telecoms infrastructure investor in the State, having spent €1.5 billion in the past five years and having committed to a further €1 billion over the next five.

“We recently announced the latest step in our €500 million fibre network investment programme, agreeing a deal with KN Circet to build the optical distribution network for the rollout of high-speed broadband to 1.4 million premises, including every town in Ireland with more than 1,000 premises, delivering a network capable of speeds up to 10Gbps,” she added.

The telco refinanced its debt in April which saw “significant demand” from investors allowing it to raise more than originally planned. The was helped, Ms Lennon said, by the reduction in Eir’s net debt-to-earnings ratio following last year’s acquisition from 4.1 times to 3.6 times.