WorldCom Ireland made a pre-tax profit of €623,439 in the year to December 31st, 2001, the first time it has recorded positive earnings since it was founded in 1994, writes Jamie Smyth
The company, which is a subsidiary of bankrupt US telecoms operator WorldCom Inc., saw turnover rise 41 per cent to €34.8 million, up from the €20.2 million revenues generated during 2001.
Mr Eamon Walsh, country leader for WorldCom Ireland, said in an interview with The Irish Times this week that achieving pre-tax profit was an important milestone, and showed the firm was no longer a start-up.
In contrast, in the 12 months to December 31st, 2000, WorldCom Ireland - which supplies a range of telecoms and internet services to the corporate sector - reported a pre-tax loss of €433,970.
Mr Walsh said the focus of the company was now on making a return on investment, rather than simply boosting revenues. WorldCom Ireland would follow its parent's new strategy of becoming cash-flow positive by mid-2003. The company's previous target to become cash positive was 2004, he said.
WorldCom Inc. set its new financial targets following the $7.2 billion (€7.2 billion) accounting scandal which led directly to the firm's application for Chapter 11 bankruptcy protection in the US.
WorldCom Ireland's latest financial results - which it filed with the Companies Registration Office recently - show it owed its parent WorldCom International €108.3 million at December 31st, 2001. This funding was used to build the firm's fibre network, brand and customer base in the Republic since 1994.
A new agreement with WorldCom Inc. has been in place since July 21st, 2002 to provide cash by way of loans when necessary. This new agreement was required because of WorldCom Inc.'s announcement that it had misstated and filed for Chapter 11 bankruptcy protection, according to the firm's accounts.
Mr Walsh said to date no irregularities had been found on the European side of the \ house, although he said investigations were ongoing and WorldCom was co-operating fully with the relevant authorities. When asked if WorldCom Ireland may have to restate its own results, he said it was "too early to tell".
Despite WorldCom Inc.'s bankruptcy filing, WorldCom Ireland should have no financial problems, according to the company. "We have the funding arrangements agreed going forward," said Mr Walsh.
