Eircom has warned that its profits for the coming financial year are likely to be 'materially lower' compared with the current year, which ended at the end of June.
The company today held a meeting with its lenders at which it presented an update on its business. Eircom has organised talks with representatives of its main lenders in an effort to tackle its €3.8 billion debt burden.
Eircom said preliminary figures for its fourth financial quarter (March to the end of June) showed that its fixed line business continued to lose money, but was stabilised by price increases in March.
The company said mobile profits would be down for the fourth quarter would be down compared with the previous three months, due to an increase in spending on sales and marketing.
Eircom said the projections for the 2011/12 financial year reflected the poor economic outlook in Ireland, continuing fixed line losses and continued competitive and regulatory pressures.
In Mat, the company warned it was likely to breach its lending agreements at the end of August. It said today that this remained the case, and it was talking to lenders about a waiver.
Earlier this year, Eircom staff accepted a cost reduction programme aimed at saving the company €92m over the next three years.
