Earnings at Three Ireland have experienced a 16% decline in the first half of this year, despite the company’s customer base growing by 300,000, according to the latest financial update. Although revenue remained relatively stable, dropping just 1% to €298m compared to the same period in 2022, earnings before interest, tax, depreciation, and amortisation fell by over €13m to €70m. Three Ireland attributed this decline to increased energy costs and inflationary pressures.
Since December, Three Ireland has seen a 9% increase in its customer base, now totaling 4.1 million customers in Ireland, representing a market share of 43.5%. The company, owned by Hong-Kong based CK Hutchison Holdings, reported its largest profit drop since 2015, with net income falling 41% to HK$11.2bn (€1.28bn) during the first six months of the year, compared to the same period last year. Revenue also declined from HK$229.6bn to HK$223.9bn year-on-year.
CK Hutchison Holdings Chairman, Victor Li, expressed concerns about the outlook for the remainder of the year, stating that consumer and business confidence may continue to soften due to the long-term effects of higher interest rates and constrained credit environments. Li also highlighted the potential for further energy and commodity price spikes and the intensifying risks associated with climate change, which are increasingly difficult to anticipate.
The company’s telecom unit, which operates in Italy, the UK, Sweden, Denmark, Austria, and Ireland, saw a 20% decline in earnings. Three Ireland also faces challenges such as rising energy costs and higher capital requirements for expanding mobile networks, particularly in Europe. CK Hutchison has been reducing its exposure in the telecommunications sector in the region. In June, its UK-based carrier Three UK agreed to merge with Vodafone Group, pending approval from authorities. This merger would create the largest wireless company in the UK if given the go-ahead. Additionally, CK Hutchison has reduced its holdings in the Italian mobile and fixed network business, forming a partnership with Swedish private equity group EQT AB.
Under this partnership, CK Hutchison will hold a 40% stake in a newly formed firm that will own and operate the business. It is important to note that the information provided in this article is based on additional reporting by Bloomberg.
