Revenue falls 2% at Eir but company sees solid growth
Eir tightens cost controls amid ‘challenging environment’
Eir said it saw solid growth in its fibre broadband and postpay mobile customer bases year on year.
But the company showed tighter cost controls, cutting operating costs by €27 million, or or 7 per cent, and adjusted earnings rose 4 per cent over the year, gaining €22 million to reach €600 million.
The company said there was solid growth in its fibre broadband and postpay mobile customer bases year on year.
“Despite a challenging external environment during the second half of the financial year, our performance in the fourth quarter remained strong and consistent with previous quarters,” said Stephen Tighe, Eir chief financial officer. “As a result of these efforts to keep Ireland connected, we have successfully sustained our trajectory and achieved our full year guidance targets, with EBITDA growth of 4 per cent for the year, operating cost savings of 7 per cent, capital investment in our fibre and mobile networks of €265 million, and a continued strong cash position of €255 million at the end of June.”
In the fourth quarter of the year, revenue fell 2 per cent to €300 million, with earnings before interest,tax, depreciation and amortisation up 5 per cent to €159 million. Operating costs were €92 million, a 1 per cent decline.
The company saw broadband growth in the fourth quarter, with a rise of 2 per cent year on year in customer numbers to 962,000. Growth in Eir’s mobile customer base was driven by GoMo, its virtual mobile network, which now has more than 200,000 customers after less than a year in business. In total, Eir has 1.156 million mobile customers, a rise of 13 per cent.
Its Eir TV offering has 78,000 customers as of the end of June.
But growth in broadband, data services, and postpay revenues was offset by a reduction in traffic, sport, and prepay revenues. Eir has also become embroiled in a public spat with Virgin Media Ireland over payments due for access to sports channels, resulting in both companies pulling their sports channels from each other’s platforms.
Broadband and mobile services providers came under intense pressure in recent months as the Government restrictions intended to slow the spread of coronavirus forced workers to relocate to their homes.
“While pandemic restrictions are being gradually eased in Ireland, the situation continues to remain very uncertain and there is unlikely to be a return to normal any time soon,” said Eir chief executive Carolan Lennon. “Our network has proven exceptionally resilient, thanks to our significant investment in recent years, including the rollout of our high-speed fibre network across Ireland, the upgrade and expansion of our 4G mobile network, and the rollout of Ireland’s largest 5G network. It has plenty of capacity to continue to serve our customers whatever happens.”
Ms Lennon said the company’s ongoing €1 billion capital investment programme is played an important role in ensuring its network remained fully operational, with Eir set to continue the upgrade work where it was safe to do so.
Its fibre to the home programme now passes more than 576,000 premises with FTTH, including 138,000 homes and businesses in urban and suburban areas with access to gigabit speeds. In total, Eir said its fibre-based broadband network extends to 2 million premises.
The company has also been upgrading its mobile network, with 5G speeds now available in 21 towns and cities across Ireland and outdoor population coverage now at over 29 per cent.
“Our investment programme will ramp up in the coming months, with safety our number one priority, and we have plans to roll out 5G to every major town in Ireland and continue passing more homes and businesses with ultrafast broadband,” Ms Lennon said.
“Our positive trading performance has also been sustained in the fourth quarter, with quarter on quarter growth in retail broadband customers of 1 per cent, postpay mobile customers of 2 per cent, and TV customers of 1 per cent all realised in a difficult and competitive market environment. With the further roll out of ultrafast fibre broadband and 5G continuing, we expect a continued solid performance and growth into the next financial year.”