Eir growth fuelled by cost cuts as competition hits revenue

Earnings at Eir rose in the first half of its financial year but growth was mainly supported by cost controls, with revenue declining during the six-month period.

In the six months to December 31st 2019, revenue fell 3 per cent or €17 million, to €617 million, led by a 3 per cent decline in fixed line revenue and 1 per cent fall in mobile revenue. Eir said the decline was driven by tough market competition as well as regulated wholesale pricing.

Earnings before interest, taxation, depreciation and amortisation were 3 per cent higher year on year, reaching €287 million. Operating costs declined 10 per cent to €191 million.

On a quarterly basis, Eir said revenue declined by 3 per cent, or €9 million year on year to €313 million, while earnings rose 4 per cent or €6 million to €147 million as operating costs fell by 9 per cent or €10 million to €95 million. The quarter also saw an increase in fibre broadband customers and mobile postpay customers.

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The company said it distributed €80 million to shareholders, leaving it with cash on balance sheet of €104 million.

"The last quarter of 2019 was a busy finish to what was a year of transformation at Eir, with new services, new investment and new energy and excitement in the business, providing strong momentum as we move into 2020 and beyond," said Eir chief executive Carolan Lennon.

"Eir is by far the largest investor in telecoms in Ireland and our €1 billion capital investment programme continues to deliver very real improvements for our customers, bringing superfast broadband to their homes and businesses, transforming their mobile experience on Ireland's largest 5G network, and bringing to market revolutionary new services such as GoMo and Eir TV."

Mobile customer base

The period under review also saw the launch of GoMo, a new virtual mobile network that has signed up more than 100,000 customers. That drove mobile growth in the second quarter, with the company’s total mobile customer base at 1.137million.

Eir now has 730,000 fibre broadband connections, representing more than three-quarters of its total broadband base.

The company said its next generation gigabit fibre network rollout continued during the period, and now passes more than 60,000 urban and suburban premises. It intends to reach a further 20 towns by April.

Eir has also continued the rollout of its 5G network, expanding to 20 towns and cities across the country and reaching 25 per cent of the population.

“Our €1 billion investment programme is now bringing very visible benefits to our customers, with the very best in new digital technologies, at the very best prices. Eir will continue to invest heavily through 2020 and beyond, with plans to roll out 5G to every major town in Ireland and many more towns to be passed with superfast fibre broadband,” said Ms Lennon.