An advertising blitz helped to bump up costs in the first half of the year at mobile operator Three Ireland, crimping its earnings despite strong growth in its customer base.
The company posted earnings before interest and tax (Ebit) for the first six months down 17 per cent to €19 million. This was despite a rise in its topline revenues of 8 per cent to €301 million, driven by 300,000 new customer accounts bringing its total base to 3.4 million.
The financial performance of the Irish unit is outlined in global results released on Thursday morning by its parent, Hong Kong conglomerate CK Hutchison, which has investments in Asia and Europe across telecoms, utilities, ports and retail.
The results show that Three Ireland pared back its capital spending in the Irish market in the first six months by almost 15 per cent compared with the same period a year ago, but it still invested a hefty €53 million. The company said its total investment in the Irish market had now breached the €2 billion mark since 2015, when it began overhauling its network after purchasing its rival O2 Ireland. It has since also invested heavily in building fibre and 5G mobile networks.
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The group’s total base of registered contract customers in the Republic has surged by almost one-third over the past year, although the average spend per head has shrunk nearly as fast as customer volumes have grown. Some of the new customers include “low-value Internet of Things (IoT) customers”, it said. Three Ireland’s business division sells IoT services to companies that want to use the internet to digitally track, for example, the performance of non-digital assets such as company cars or energy devices.
Average monthly revenue per user in Ireland fell 16 per cent in the first six months of the year, as the IoT effect diluted ratios. Three-quarters of its customers are on contracts with the company. Three said it spent heavily in the first half of the year on “marketing costs following the easing of mobility restrictions” in the market here.
Simon Henry, Three Ireland’s chief financial officer, said the results were “in line with expectations”. He said the company was “pleased” with the rise in customer numbers and the associated “strong growth” in its revenues.
Three entered the Irish market in 2005. It is the number two player in the market here in terms of revenues, behind Vodafone. The mobile operator also has operations in European markets including Austria, Italy, Sweden, Denmark and Britain, where its unit is run by Irishman Robert Finnegan, who is also the chief executive of Three Ireland.
Hong Kong-listed CK Hutchsion was founded by 94-year old tycoon Li-Ka-Shing, who is known as “Superman” in his homeland.
