Eircom is to cut a further 300 jobs by March 2011, taking its total cuts to 1,200 since March 2009, after it reported a fall in profits and revenue for the first quarter of this year.
Eircom said it had 900 job cuts lined up and that another 300 will be announced ahead of time. It added it saw the vast majority of these as voluntary redundancies, and has no plans for compulsory cuts. The announcement follows the operator’s latest financial results, which saw several drops across the business.
Sales for the quarter ended March 31, 2010 were down seven per cent to €455 million compared to the same period a year ago. Operating costs were down eight per cent to €285 million, which Eircom said reflected lower pay and non-pay costs, resulting from lower headcount and other cost saving initiatives introduced in the year, and lower direct cost of sales in line with the reduction in revenue.
Mobile revenue decreased five per cent to €112 million, as a result of lower ARPU, partially offset by mobile broadband growth. EBITDA fell €3 million to €31 million, which it said was a result of lower revenue, partially offset by lower pay costs.
Fixed line revenue dropped seven per cent to €356 million, which the company said reflected mainly lower access channels, voice and data traffic, and reduced interconnect costs. Fixed line adjusted EBITDA was also down, dropping three per cent to €139 million.
In the nine months to the end of March 2010, Group sales fell by nine per cent to €1.38 billion with fixed line sales also down over nine per cent at just over €1 billion. Mobile revenues fell six per cent to €351 million.
Fixed line customers in the nine months fell by 75,000 year-on-year to 1.49 million, but it did add 32,000 mobile customers over the period. Capital expenditure in the period was €218 million, compared with €270 million in the previous 12-month period. Eircom’s net debt at the end of March was €3.3 billion and it had cash balances of €265 million.
Eircom chief executive officer Paul Donovan said: “Building upon the shareholder stability achieved with the arrival of STT as a strategic shareholder in January, we are continuing to actively rebuild Eircom for the future. Our continued relentless focus on cost reductions has delivered material improvements in our ability to compete. The Company retains a strong cash balance and positive headroom in servicing its debt.”