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LONDON (Alliance News) - Telecommunications firm BT Group PLC cautiously pushed full-year profit forecasts to the upper end of its range and cut its interim dividend Thursday after profit rose on lower costs despite falling revenue.
For the six month ended September, pretax profit rose 24% to GBP1.34 billion from GBP1.08 billion the year prior. Revenue fell 1.7% to GBP11.59 billion from GBP11.79 billion the year before.
Profit performance was boosted by a reduction in operating costs. These fell to GBP9.90 billion from GBP10.33 billion the year before.
Revenue performance, however, continued to be hurt by a further 7.1% decline in BT's global services business to GBP2.33 billion in the first six months from GBP2.51 billion the year prior. This, alongside a fall in revenue due to price changes for the Openreach fixed-line network, counteracted 2.7% growth at the BT Consumer business to GBP5.27 billion from GBP5.13 billion the year prior.
"We continued to generate positive momentum in the second quarter resulting in encouraging results for the half year," outgoing BT Chief Executive Officer Gavin Patterson said. "We are successfully delivering against the core pillars of our strategy with improved customer experience metrics, accelerating ultrafast deployment and positive progress towards transforming our operating model."
In June, Patterson announced he would step down as CEO. In October, BT announced that Worldpay Inc Co-CEO Philip Jansen will replace him at the end of January 2019.
"In Consumer, we continue to see strong sales of our converged product, BT Plus, and have seen good mobile sales following new handset launches," Patterson added. "Last month EE demonstrated 5G capability from a live site in Canary Wharf. We have maintained momentum in our enterprise businesses despite legacy product declines."
"Openreach has signed up the majority of its major and a number of its smaller communications providers to its new volume related discounts which should increase average broadband speeds across the UK," Patterson explained. "We are making positive progress on the key enablers to ensure that we can secure a fair return on our [fibre to the premises] investment, and are ready to expand the FTTP programme up to and beyond 10 million premises if the conditions are right."
BT kept its forecasts for the full year ended March 2019 broadly unchanged. It did, however, add that its expected earnings before interest, taxes, depreciation and amortisation to be at the "upper half" of its GBP7.3 billion to GBP7.4 billion range.
For the year ended March 2017, BT generated adjusted Ebitda of GBP7.65 billion.
BT trimmed its interim dividend to 4.62 pence per share, down 4.7% from 4.85p the year prior.
"Our strategy is delivering," Patterson explained, "with benefits evident from the steps we've been taking to simplify and strengthen the business and improve efficiency".
