Esat Digifone posted pre-tax losses of £36.2 million last year, more than double those of 1996. It also showed a turnover of £35.2 million last year. The company's chief executive Mr Barry Maloney said yesterday the company hopes to record an operating profit by the end of this year. He said Digifone was very pleased with its financial performance which was significantly better than expected.

The details are contained in the Securities Exchange Commission filing (SEC) which Esat Telecom made at the end of last month, as part of the process for raising £29 million through a new share issue. Esat Telecom is a 45 per cent shareholder in Digifone.

Mr Maloney said the growth in subscribers - over 100,000 at the end of last December - had been well ahead of the 57,000 which Digifone projected originally. It is understood that growth has slowed slightly and is currently around 150,000 subscribers.

Digifone's cost of sales last year was £35.7 million. Its accumulated losses at the end of 1997 was £52.3 million.

Digifone's financial details show administrative expenses of more than £2 million for 1996 and 1997, (the bulk of it incurred last year) for technical support and other services from Telenor Invest AS, its other 45 per cent shareholder. Esat Telecom was also paid almost £223,000 in commissions for referring existing customers to Digifone. Then Digifone in turn charged Esat £180,000 for their contribution to professional, consultancy and other charges "incurred by Esat Digifone," in 1996 and 1997. Digifone incurred a sharp rise in staff wages last year.

In 1997, wages and salaries amounted to £7.25 million, compared to £2.2 million in 1996. At the end of 1997, Digifone had 338 employees, compared to 116 employees the previous year.

Directors received £75,000 and £328,000 for other services. The details filed also show that a director received £90,000 for loss of office.

The notes to the financial statements point out that Digifone has signed a 10-year project finance facility with its bankers. The banks have made £112 million available on condition that the shareholders contribute £75 million.

Mr Maloney said yesterday that Digifone would spend £50 million investing in its network this year and had spent a similar amount last year.

Meanwhile, the results also show that one director has been granted options to acquire at par value up to almost 2 per cent of the initial specified share capital of Digifone. This would represent approximately one million shares. The options are granted over a three-year period and 250,000 of the shares are subject to Digifone achieving specific performance criteria by the end of December.