Company of the Month, September 2017: eir

Company of the Month | Mon 9 Oct | Author – Business & Finance
eir mobile phone

The telecommunications company eir continues to build momentum, with a 4% increase in profits announced in September.

Strong full year results announcements from eir saw EBITDA up 4% year-on-year to €520m. The results were driven by continued growth of the company’s broadband, eir vision and eir sport customers. Underlying revenue grew 1% to €1.3bn in the twelve months to 30 June, after the effects of foreign exchange and the cost of regulator-enforced changes to its network charges were stripped out.

“Our continued product innovation and sustained network investment has ensured that we retain our position as the leading broadband, telecommunications and media company in Ireland, delivering enhanced services and competition in the marketplace. I am very pleased with what we have achieved over the past 12 months and I am very excited about what the future holds for eir and our customers,” said Richard Moat, CEO, eir.

Operating costs for the year were €490m representing a reduction of 5pc or €26m compared to the prior year.

“We have produced another year of strong financial and operational results,” said Huib Costermans, CFO, eir.

“The continued growth of our broadband, eir vision and eir sport customers coupled with the increased penetration of triple and quad play bundles, now at 25pc, is evidence of the value that customers see in the products and services we provide,” Mr Costermans continued.

Growth areas

The total group broadband customer base was 896,000 customers at 30 June, an increase of 42,000 compared to the prior year.

Wholesale broadband connections increased by 47,000 for the year ended 30 June, bringing the total wholesale broadband lines to 452,000 lines at year-end.

Meanwhile the group mobile customer base increased by 1,000 compared to the corresponding prior year, to a total of 1,061,000 customers, after the successful rebranding exercise of mobile phone arm Meteor to the eir brand.

Fibre rollout 

A successful month for eir saw them meet their September targets for broadband connections, having now on track with over 100,000 rural homes connected to high-speed fibre broadband.

Carolan Lennon, managing director of Open eir, eir’s wholesale arm, called the announcement of the milestone figure, “further proof of our determination to deliver on our public commitments.”

“We have completed one-third of our rural 300k fibre roll-out programme and we are on track to complete the roll-out of this programme by the end of next year.

“There are very clear and ambitious targets set out in our commitment agreement with the Government and we are 100% focused on meeting those targets.

“We remain focused on delivering high-speed broadband to as many communities across Ireland as possible,” added Lennon.

Sale rumours

The Irish Times reported recently that French billionaire and majority owner of Paris-listed telecoms company Iliad, Xavier Niel, is in talks to buy a major stake in eir, potentially taking a majority interest.

Eir was valued at €3.5 billion last year when Singaporean sovereign wealth fund GIC acquired a stake in the company.

It was reported that eir owners, led by New York hedge fund Anchorage Capital – which owns a 42% stake in the company – were weighing up either a trade sale of the group or a stock-market listing.

In a statement released mid-September, eir revealed, “The major shareholders of Eircom Holdings S.A. (“EHSA”) have informed the Board of the Issuer that they have been approached by a potential investor who may wish to make a significant investment in EHSA alongside them. In so informing the Board, the major shareholders have affirmed their continuing commitment to their investment in EHSA for the foreseeable future. There can be no certainty that the discussions between the shareholders of EHSA and the potential investor will result in a transaction.”