Revenues dip at Eir as it reports rise in broadband subscribers

Talks between the owners of Eir and French telecommunications billionaire Xavier Neil are continuing despite recent media reports suggesting that discussions have stalled over the company's valuation.

Speaking to The Irish Times after the company reported a slight rise in first quarter earnings, chief executive Richard Moat said "talks were still in progress". But he added that it remained uncertain whether a deal would be concluded.

His comment came as the State’s largest telco announced a 2 per cent decline in underlying revenues to €322 million due to a fall in mobile termination rates and after the company exited some low margin business.

Eir reported earnings before interest, taxes, depreciation and amortisation (Ebitda) of €125 million for the three months ending September 30th, up 2 per cent or €3 million on the same quarter a year earlier.

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Reported sales were 3.5 per cent or €11 million lower at €316 million. The cuts to mobile termination rate cost the company €4 million.

Operating costs were down 4 per cent to €121 million in the quarter.

“Earnings are up 2 per cent year-on-year which, because this is [Eir’s fiscal] Q1, shows we are on a good trajectory for the financial year,” said Mr Moat.

Chief finance officer Huib Costermans reiterated previously issued guidance of low single digit growth for the full year and said he expected there would continue to be “relatively high” levels of capital expenditure due to the rollout of fibre broadband.

Eir said fixed-line revenues totalled €239 million, down 4 per cent year-on-year. Fixed-line ebitda was flat at €110 million.

Some 64 per cent of the company’s 903,000 broadband customers are signed up to high-speed services, up 23,000 on the prior quarter and 110,000 higher than in September 2016.

The company said it had 1.05 million mobile customers at the end of the first quarter with half of these on postpay contracts.

The telco said the number of Eir Vision television subscribers it has rose by 16,000 year-on-year to 74,000.

Mr Moat said the company was particularly pleased by the takeup of Eir Sports, which now has 235,000 customers, equivalent to about 48 per cent of the broadband base.