Eir dividends hit €1.73bn since Niel takeover

Eir paid €800 million in dividends in the nine months to September to a holding company owned by its main shareholders, French billionaire Xavier Niel and two US hedge funds.

It brings total shareholder payouts to €1.73 billion since two companies controlled by Mr Niel acquired 64.5 per cent of the Irish telecoms group in April 2018, in a deal that put an equity value on the business at €1 billion.

The remainder of Eir is owned by New York-based hedge funds Anchorage and Davidson Kempner, which sold part of their exiting holdings as Mr Niel’s NJJ investment vehicle and the then publicly-quoted telecoms business Iliad took a controlling stake. The businessman took Iliad private last year.

Some €400 million of Eir dividends were used in 2019 to redeem loan notes that Anchorage and Davidson Kempner had received as part-payment for shares the previous year.

All told, Mr Niel’s companies have benefited to the tune of €858 million from Eir dividends since they acquired their shares in 2018 – some €200 million more than what they paid for their combined stake.

The latest dividend payment to a holding company owned by the shareholders was disclosed in documents published on Tuesday, as Eir reported that its revenue fell in the third quarter and earnings were flat, in line with expectations, as the company continued to roll out fibre broadband and 5G mobile services around the country.

The dividend payouts in recent times have been supported by Eir selling a portfolio of phone masts in 2020 and a minority stake in its wholesale fibre network earlier this year.

Reported revenue for the three months ended September 30th was €306 million, down €3 million from the same period a year earlier, according to the latest financial report. Over the first nine months of the year, revenue was €4 million lower at €900 million.

Adjusted earnings before interest, tax, depreciation and amortisation (ebitda) was flat at €139 million in the third quarter compared to the same period last year. Operating costs for the quarter were €100 million, down 2 per cent year on year, while non-pay costs fell by 9 per cent. Eir’s costs relating to pay were up 7 per cent, or €3 million.

The company employed 3,487 full-time staff at the end of the third quarter, an increase of 4 per cent year on year. It had total borrowings of €2.54 billion and cash on hand of €659 million at the end of September.

The company said its fibre broadband base rose 2 per cent to 840,000 connections, with its overall broadband base down 1 per cent to 957,000 due to a decline in wholesale customers. Eir’s fibre to the home (FTTH) now passes more 925,000 premises.

Mobile customers were also higher at almost 1.3 million, a 7 per cent rise, with an increase in post-pay customers to 960,000. The company has made its 5G services available to more than 500 towns and cities across Ireland.

However, despite gains in other areas, Eir TV customers fell 2 per cent to 82,000.

“The pace of our FTTH network roll-out is something we are really proud of and we look forward to hitting the major one million milestone early next year,” said Eir chief executive Oliver Loomes. “Eir has and will continue to make significant investments in our infrastructure, we invest €250 million annually to ensure we have world-class technologies and the highest-quality connectivity available to our customers.”

Eir filed for examinership in 2012, the result of the group racking up an unsustainable level of €4.1 billion of borrowings following a series of changes of control after the State floated the business on the stock market in 1999. Under the rescue plan, some 40 per cent of debt mountain was written off.

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