Mobile carrier Three’s Irish and UK units to run separately despite management overlap

Phone operator swings to net loss in Ireland but says it is due to accounting provisions

Three swung from a profit of €19 million to a loss of €34 million, mostly due to a the writeback of provisions made in relation to its network consolidation plan.

Three swung from a profit of €19 million to a loss of €34 million, mostly due to a the writeback of provisions made in relation to its network consolidation plan.

 

Robert Finnegan, the chief executive of mobile operator Three in Ireland and also in the UK, says the two units will continue to operate separately and will not be integrated, despite sharing senior management.

Mr Finnegan, who has run Three Ireland for more than 15 years, was appointed by its owner, Hong Kong conglomerate CK Hutchison, to also be chief executive of its UK unit last year at the outset of the pandemic. He started his new role juggling the leadership of both companies in the same week that Boris Johnson’s government locked down the UK.

“It was a baptism of fire,” said Mr Finnegan this week. He said that although Three has solidified its position here as the second largest operator and is prominent in the business market, it has only a 10 per cent share in the UK and no real presence in the corporate market there.

In addition to Mr Finnegan’s dual role, Three Ireland’s chief commercial officer, Elaine Carey, is also fulfilling a dual mandate with the UK business, although she has separate teams working in each country.

“They are two separate businesses. There is no intention of integrating them,” he said.

Mr Finnegan was commenting following the filing of Three Ireland’s detailed financial statements for 2019 in the Companies Registration Office (CRO). They showed 2019 revenues up 2 per cent to €603 million.

Loss

However, the company swung from a profit of €19 million to a loss of €34 million, mostly due to a the writeback of provisions made in relation to its network consolidation plan, which had previously flattered the 2018 profits figure.

On an underlying basis, Three Ireland made losses of more than €32 million in both years. Mr Finnegan said there is a return for the Hong Kong shareholders in the form of interest it pays its parent on loans afforded to the Irish business, and that its underlying losses are not of concern.

“The shareholders are happy with their investment,” he said.

He said Three’s network had “stood up well” to the demands of customers working from home during Covid-19 lockdowns. Its customers’ home data usage is currently about 25 per cent up on where it would normally be, he said.

CK Hutchison’s stock market filings in Hong Kong give a more up to date picture of the financial performance of the Irish unit, compared to Three’s statutory CRO accounts. In the first half of 2020, Ireland was the best performing market in Europe for Three, which also has units in Italy, Austria, Sweden, and Denmark, when measured by Ebitda (earnings before interest, tax depreciation and amortization), a standard accounting metric for managerial performance.