NTL sees pre-tax losses rise to €24.2m

NTL Communications Ireland, which provides television services to Dublin, Galway and Waterford, reported pre-tax losses of €24.2 million in the year to December 31st, 2001, up from €11.9 million in the previous year.

Turnover at the firm, a subsidiary of US firm NTL that filed for Chapter 11 bankruptcy protection in May, rose to €69.6 million, up from €66.1 million in 2000.

The steep rise in pre-tax losses was caused by an increase in operating expenditure, which jumped to €89.3 million during 2001 from €77 million in 2000, papers filed with the Company's Registration Office show.

The financial performance underlines NTL Ireland's difficulty in getting a return from its purchase of Cablelink from Eircom and RTÉ in 1999 for €679 million.

A breakdown of the firm's operating expenses shows a rise in interest charges to €4.7 million from €326,153 in 2000. Net debt also increased to €112.6 million from €46 million one year earlier.

The cost of wages remained roughly the same at about €20 million, despite a reduction of NTL Ireland's workforce to 483 the end of 2001 from 597 at the close of 2000. The company has subsequently reduced its staff to 424.

Increasing costs in the Republic due to inflation also affected NTL Ireland, which was unable to increase turnover significantly during 2001. Price controls imposed by the telecoms regulator, which prevented NTL Ireland from increasing its prices for most of 2001, was also a factor.

Although the firm applied for a price rise in early 2001, telecoms regulator Ms Etain Doyle did not approve an increase until October 2001. NTL Ireland's financial return for 2002 should show a substantial increase in turnover due to the price rises.

NTL Ireland's decision to halt work on its digital upgrade programme in early 2001 reduced the firm's ability to generate revenue from the introduction of new products such as digital television and high-speed internet connections.

The results show the company's decision to halt its upgrade programme dramatically reduced its capital expenditure to €43.3 million, from €118.9 million in 2000, reflecting the lower costs involved in maintaining its core network compared to upgrading it.

NTL Ireland's parent supplied more than €113 million to the company in 2001, from €41 million during 2000. The amount of cash available to NTL Ireland may fall this year following its parent's filing for chapter 11 with debts of $17 billion (€17.3 billion).

NTL expects to emerge from this process next month by converting $10.6 billion debt into equity in one of the world's biggest corporate restructuring plans.

NTL Ireland's financial results show it acquired Irish telecoms firm National Transcommunication for €4.3 million in October 2001. The firm's voice and data businesses were incorporated into NTL.

NTL Ireland is involved in a legal dispute with the Revenue Commissioners over the amount of VAT charged for its services, according to the filing with the Company's Registration office. It is understood this case was initiated in 1989 by Cablelink.