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NTL Ireland's parent company, which is in the middle of a major restructuring, reported a solid quarterly rise in first quarter core earnings but admitted that its lack of cash could impact growth.
On Tuesday, NTL reported first quarter earnings before interest, tax, depreciation and amortisation of goodwill (EBITDA) of STG177 million, compared with STG159 million in the fourth quarter of 2001 and STG86 million a year ago. Its EBITDA margin doubled to 28 percent over the year and the company's revenue came to STG639 million, compared to STG614 million last year.
NTL Ireland, also known as CableLink, revealed in its results that 55 jobs in Ireland were cut in January as part of a voluntary redundancy scheme that was opened to employees in December. The firm now employs just over 400 in Ireland.
NTL reported revenues of STG14 million in the period for its Irish operation, with EBITDA of STG3 million. This compares to revenues of STG10 million and EBITDA of just STG1 million in the same period a year earlier. Moreover, NTL said that it now had 371,500 cable television customers in the Republic, with 15,700 of those customers watching TV on the digital platform. The firm also said that as of 31 March, it had 4,600 telephone customers and 1,900 Internet customers in Ireland, with 500 broadband Internet users in the Dublin area.
With regard to its Irish Internet customers, NTL Ireland claimed that penetration has reached almost 20 percent in the initial target area for the cable modem trial that commenced late last year. "This is particularly encouraging given that total Internet penetration in this area is estimated at 35 percent." NTL said.
Nonetheless, any success in its smaller Irish operations have been greatly overshadowed by the continuing difficulties its parent company is experiencing, despite its proposed restructuring scheme.
"We expect our growth in 2002 to be curtailed by funding constraints. Although our current business plan includes a reduction in the number of new customers and an increase in revenue from existing customers, our cash constraints present many challenges to the successful execution of the plan," the company said. The company also warned that its elaborate refinancing plan, announced earlier this year, could take too long and may impact operations.
That refinancing plan saw NTL file for chapter 11 bankruptcy protection in May as part of its USD10.9 billion debt-for-equity swap that will give bondholders control of the business. Bondholders will also provide USD500 million to the company in new capital after the deal is completed.
Another aspect of the restructuring will see NTL, which was over USD17 billion in debt, spin off many of its non-UK and Ireland units in a separate European company that will most likely go up for sale. Courts have set 12 July 2002 as a hearing date to consider approval of the entire refinancing plan, which will be the biggest in corporate history.
However, even if the plan is fully approved by the courts and the parties involved, the cable company will still face a number of lawsuits which have been brought against it by its old shareholders, who allege that NTL management misled them.
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