This stock is boring. Seems like the company is doing fine.
Aren't any Irish girls SI members?
DJ WRAP: Mobiles Boost Irish Eircom Interim Pft
DOW JONES (Dublin)--A rapidly growing mobile phone business helped recently privatized Eircom
PLC (EIR), Thursday report a forecast-beating 15% rise in first-half pretax profit to EUR198 million
before exceptionals.
John Conway, analyst at BCP Stockbrokers in Dublin, had forecast pretax profit at EUR169 million
before exceptionals, one of the more median forecasts among Irish analysts.
"These results were ahead of expectations," Conway said. "Eircom especially had good figures from
the high growth areas of mobile and data communications, which is good news for the company."
Analysts forecast pretax profit for the six-month period to Sept. 30 at between EUR155 million and
EUR179 million before exceptional items, citing a strong mobile phone business, low corporate tax
rates and a buoyant Irish economy.
Similarly, analysts forecast earnings per share before exceptional items around 5.4 cents before
exceptional items, but Eircom again surpassed predictions with an EPS of 6.7 cents before
exceptional items. It will also pay an interim dividend of 1.6 cents per share.
Exceptional items included EUR32 million for Y2K upgrades, rebranding/flotation costs and EUR6
million relating to other charges.
Eircom also made a exceptional gain of EUR407 million on the 75% sale of Irish Internet service
provider Cablelink.
Eircom's mobile phone business, Eircell, gave Eircom its major boost. It saw its customer base rise
21% to 778,000 for the interim.
"We've gone from being a telephone company to a telecommunications company. We're now moving
toward being a communications/information company," Chief Executive Alfie Kane told Dow Jones
Newswires.
He added that the company will continue its aggressive drive into the world of e-commerce and data
communications, especially in the U.K. He aims to see international sales accounting for 20% of
business in five years. Currently, intra-Ireland sales account for 99% of business.
"We'll focus on in-house development of both staff and equipment and investment in more specialist
companies, rapidly acquiring a critical mass of essential software skills," Kane said.
Eircom also said Thursday that it acquired a 30% stake in Irish Flexicom Ltd., an e-commerce
software development firm. The maximum payment will be EUR10.4 million of which up to EUR7.1
million will be used to finance Eircom's future growth.
Formerly known as Telecom Eireann, Eircom was sold by the Irish government in July via an initial
public offering that raised IEP3.7 billion for the Irish exchequer. Shares floated at EUR3.90 in July,
achieved a yearly high of EUR5.00 the same month, but dropped significantly since, despite a healthy
telecom sector.
"I refrain from making comments about share prices in the short-term," Kane said. "World economic
trends, sector movements and, of course, company performance all play a role. But there's been no
change in company performance since flotation. We're, therefore, more concerned with enhancing
long-term share value."
BCP's Conway, however, supports Kane's view: "Share price has languished largely due to a lack of
understanding by the market and a poorly performing Irish stockmarket. Since flotation we have
given the shares a strong buy. The interim figures have confirmed that stance."
At 1442 GMT, Eircom shares were down 17 cents at EUR4.13. |
