Price cuts, higher costs hit Eircom profits

Eircom, encircled by a clutch of bidders, reported today a 43 per cent fall in annual pre-tax profits, as price cuts and rising cost of sales hit earnings.

The company which is considering bids for its fixed-line operations, said pre-tax profit before exceptional items for the year ending March 31st 2001 fell to euro 187m ($158.7 million).

Full year EBITDA (earnings before interest, tax, depreciation and amortisation) fell 12 per cent to euro 656m.

Earnings per share before exceptionals and goodwill fell some 30 per cent to 8.4 cents. Final dividend per share was 2.46 cents. Turnover rose 10.4 per cent to euro 2,158m.

Chief executive, Mr Alfie Kane,said: "'It's been a year of unprecedented change for companies throughout the telecommunications sector. Against this background and despite the fact that Eircom now operates in one of the most liberalised markets in Europe, we have achieved double digit revenue growth."

Mr Kane said: "The final dividend of 2.46 cents represents a higher dividend pay out ratio of 55% of normalised earnings, consistent with the company's dividend policy outlined in the market statement on future strategy on 9th April 2001."

Additonal reporting by Reuters