& cplSiteName &

BT Reports Fiscal Q3 Profit of £675M

Light Reading
News Wire Feed
Light Reading
2/1/2013
50%
50%

LONDON -- BT Group plc (BT.L) today announced its results for the third quarter and nine months to 31 December 2012. Ian Livingston, Chief Executive, commenting on the results, said: "Our fibre plans are helping to make the UK a broadband leader in Europe. More than 13 million premises can access our fibre broadband and we are passing around 100,000 additional premises every week. Take-up is growing strongly with around 1.25 million homes and businesses now enjoying the benefits of faster speeds. This gives us an excellent platform for our push into TV and Sport later this year. Our pre-season training is going well. We have secured attractive new content and world class production facilities at the Olympic Park and are building a strong team. “Our engineers have worked tirelessly following some of the wettest weather on record. Not only did they complete a record number of field visits in the quarter, they also connected a further 281,000 homes and businesses to broadband and helped us grow the number of landlines. BT Global Services has also done well securing £1.9bn of new orders, up 17%. “We have made progress in a number of areas and delivered solid financial results. These are in line with our expectations for the year, which remain unchanged.” Operating results overview
Our key measure of the underlying revenue trend, underlying revenue excluding transit, was down 3.1%, an improvement compared with recent quarters reflecting better performances from BT Global Services and BT Wholesale. Whilst improving, our underlying revenue trend continues to be impacted by the tough conditions in Europe and the financial services sector, regulatory price reductions and lower revenue from calls and lines. Reported revenue of £4,359m was down 9% which includes the impact of certain regulatory decisions which have been treated as a specific item (see Specific items below). Excluding specific items, revenue was down 6% at £4,510m. This decline includes a £66m reduction in transit revenue (including mobile termination rate reductions of £37m), a £50m negative impact from foreign exchange movements, and an £8m impact from disposals. Underlying operating costs before depreciation and amortisation were down 7%, or 5% excluding transit, reflecting the impact of our cost transformation programmes and reduced cost of sales due to the decline in revenue. Total operating costs before depreciation and amortisation and specific items decreased by £274m, or 8%, to £3,069m, and have reduced by over £1bn for the nine months. Adjusted EBITDA increased by 2% to £1,548m. Foreign exchange movements and disposals had no significant impact on EBITDA. Depreciation and amortisation decreased by 4% to £706m largely due to lower overall capital expenditure over the last three financial years. Capital expenditure decreased by 14% to £572m primarily reflecting the higher spend last year on Wholesale Broadband Connect. Profit before tax
Adjusted profit before tax was £675m, up 7%, reflecting the higher EBITDA and lower depreciation and amortisation. Reported profit before tax (which includes specific items) was £628m, down 4%. Tax
The effective tax rate on the profit before specific items was 22.7% (Q3 2012: 24.1%) and is in line with our outlook of around 23% for the full year. Fibre and broadband
We have passed more than 13m premises with our fibre broadband, an increase of around 1.3m in the quarter. Take-up is growing strongly and we achieved around 250,000 connections in the quarter, with around 1.25m homes and businesses now taking a fibre based service. Total broadband market net additions grew 7% to 281,000 of which we added 122,000 retail broadband customers, a 44% share. Regulation
In the quarter Ofcom issued its final determinations on disputes over historic Ethernet pricing (see Specific items below). We disagree with the determinations and are likely to appeal against them. These determinations cover the period from April 2006 to March 2011 and do not impact Openreach’s current pricing for Ethernet products. The charge controls for WLR, LLU and ISDN30 products which became effective in April 2012 impacted revenue in the quarter. We continue to expect these to have a negative impact of around £100m-£200m on group revenue in the 2013 financial year with a further similar year on year impact in the 2014 financial year. The July 2012 Court of Appeal decision against wholesale ladder termination pricing also impacted the third quarter year on year EBITDA trend by £12m. Ofcom’s final determination on the Business Connectivity Market Review and the associated Leased Lines Charge Control is expected to be issued in the next few months. We also expect the consultation on the Wholesale Narrowband Market Review in the next few weeks. Specific items
Specific items resulted in a net charge after tax of £38m (Q3 2012: £15m net credit). Charges of £151m and £36m were recognised against revenue and EBITDA, respectively, following Ofcom’s determinations on historic Ethernet pricing. Restructuring charges of £28m (Q3 2012: £8m) were incurred. In the quarter we started the next phase of our group-wide restructuring programme which is expected to generate future cost savings and further improve customer service delivery. As part of this programme, we commenced the reorganisation of BT Innovate & Design and BT Operate, our two internal service units, to form BT Technology, Service and Operations (BT TSO). This new unit is responsible for the innovation, design, test, build and running of our global networks and systems on an end to end basis. We are also further rationalising and transforming our resources, processes, networks and systems within BT Global Services. We expect additional group restructuring costs to be incurred over the remainder of this year and next. A profit of £9m was recognised on the disposal of our remaining 9.1% interest in Tech Mahindra. Our total investment in Tech Mahindra has in aggregate generated returns of around £350m. Net interest income on pensions was £8m (Q3 2012: £50m). Earnings per share
Adjusted EPS was 6.6p, up 8%, reflecting the growth in profit before tax. Reported EPS (which includes specific items) was 6.2p, down 2%. These are based on a weighted average number of shares in issue of 7,865m (Q3 2012: 7,766m). BT Group plc

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, September 14, 1:00PM EDT
What Is Agile?
Kent J. McDonald, Product Owner, Agile Alliance
UPCOMING COURSE SCHEDULE
Friday, September 16, 1:00PM EDT
How to Implement Agile
,
Wednesday, September 21, 1:00PM EDT
What Is DevOps?
Colin Kincaid, CTO, Service Provider, Cisco
Friday, September 23, 1:00PM EDT
How to Implement DevOps
,
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
F5 Virtual Network Function Integrations With Partner Orchestration Platform

8|24|16   |   6:38   |   (0) comments


F5's Kishore Patnam, product manager for F5's service provider solutions, discusses why service providers are moving towards virtualization and how his clients are utilizing F5's solutions.
Between the CEOs
CEO Chat: Intel's Alexis Black Bjorlin

8|17|16   |   06:23   |   (0) comments


Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Telecom Innovators Video Showcase
Accelerating Telecom Digital Transformation With Nominum DNS

8|1|16   |   12:04   |   (0) comments


Light Reading's Steve Saunders gets an update from Nominum CEO Gary Messiana on how his company is helping carriers on the digital transformation journey.
LRTV Custom TV
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments


Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (1) comment


As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments


Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments


VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (2) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
LRTV Custom TV
NFV in 2016: Part 2 – Climbing the Virtualization Maturity Curve

7|19|16   |   06:56   |   (0) comments


Many of the initial use case implementations are single-vendor and self-contained. The industry is still climbing the virtualization maturity curve, needing further clarity and stability in the NFV infrastructure (NFVi) and greater availability and choice of virtualized network functions (VNFs). Interoperability between NFVis and VNFs from different vendors ...
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Five of the Top 10 most targeted countries in Check Point Software Technologies' global Malware & Threat Index for Q1 2016 are in Africa.
Hot Topics
Cisco Developing 'Monica' Digital Assistant
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/22/2016
VoLTE Can Drive 4G Small Cells Adoption
Ravi Narayanan, Senior Analyst – Cloud & Next Generation Mobile Networks, Heavy Reading, 8/18/2016
Rocket Fiber Lights Up Detroit With Gigabit
Elizabeth Miller Coyne, Managing Editor, 8/22/2016
'Most Wanted' Kobi Comes Home
Ray Le Maistre, Editor-in-chief, 8/23/2016
Arista Banned From Importing Products – Cisco
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/23/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
Animals with Phones
Live Digital Audio

Bridging the tech skills gap is a major challenge for service providers and suppliers alike today – and the challenge is two-fold when it comes to increasing the number of women in the comms space. Level 3 Communications has made it a priority to overcome both challenges by implementing several unique programs focused on building the right candidates from within – in addition to filling the funnel by supporting STEM and other education programs. During this radio show, you’ll learn about these programs from Mary Beth McGrath, SVP of Global Talent Management at Level 3, and the best ways to bridge your own skills gap so that you are motivated and equipped for change. Plus you’ll have the chance to ask Mary Beth your questions live on the air.