Thursday 22 February 2018

Eircom plans €267m property sell-off as the market recovers

Donal O'Donovan

Donal O'Donovan

EIRCOM is planning to sell off some of its €267m property assets as the market picks up.

The expected sales come as the company announced annual results for 2013, the first full year results since the telecoms company came out of examinership last year, following the biggest bankruptcy in Irish history bar Anglo.

The results show revenues and earnings both declined in the year to end of June 2013.

Revenues were down 8pc to just under €1.4bn while earnings were off by 12pc to €487m.

However chief financial officer Richard Moat said the results represent a stabilisation for Eircom. Earnings are €22m ahead of the company's plan to turn around the business.

There are no plans for any further business unit disposals following this year's disposal of Eircom Phonewatch for a reported €100m, he said. However, Eircom will look at property disposals as the market picks up, he added.

The company has been left with excess real estate capacity as more of the technology used to power services becomes smaller and more equipment is pushed out of buildings to road side boxes. Accounts filed for the end of 2012 list the book value of Eircom's property assets at €267m.

The results come after the firm announced the rollout of its 4G service. A planned television service will see Eircom become the first Irish operator to launch a so called 'quad-play' bundle to customers – made up of mobile and fixed line phone services, broadband and TV.

The business had 451,000 retail broadband customers in the year end, down 1pc in the year. Mobile customer numbers dropped 2pc to 1,059,000 through the end of June 2013, but the company said it is winning market share in the more lucrative bill pay segment.

In the fixed line market, revenues fell 9pc for the year to €1.09bn which was reflected in a corresponding 12pc decline in fixed line EBITDA to €470m compared to the previous year.

Earlier this week, Eircom became the first Irish operator to launch a 4G mobile network, giving smartphone, tablet and laptop users broadband speeds up to 10 times faster than what existing mobile services offer.

In a major turnaround the company tapped bond markets for €350m in fresh finance this year. Those bonds later dropped to trade at just 92pc of face value but are now trading 103pc of face value.

Mr Moat and Eircom chief executive officer Herb Hribar travelled to London to deliver their annual results in person to a meeting of the dozens of investment funds and banks that now own the company. The syndicate took control of Eircom through a debt for equity swap executed through the 2012 examinership that saw €1.8bn of debt written off.

Irish Independent

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