BT predicts bounce back
October 29, 2020
BT has published its results for the half year to September 30th. The telco described its revenue as being “relatively resilient” at £10.59 billion (€11.74bn), down 8 per cent – largely attributed to the impact of Covid-19 including reduced BT Sport revenue and a reduction in business activity in its enterprise units, and declines in legacy products.
BT said that its roll out of fibre broadband had reached record levels of 40,000 premises a week in the second quarter. In total, it has now provided fibre networks to over 3.5 million UK households.
Key strategic developments:
- All of Openreach’s major CP customers now selling FTTP with strong increase in sales in Q2
- Consumer aligns pricing policies across all products and services to CPI plus 3.9 per cent per annum to provide consistent, predictable pricing for new and regrading customers and to support network investment
- Strong operating performance despite the ongoing impact of Covid-19
- FTTP rollout reached record levels in Q2 with run-rate of 40,000 premises per week; 3.5 million premises passed to date
- Openreach to stop selling copper products to c.1.8 million FTTP-enabled premises by September 2021 latest
- 5G-ready customer base now over 1m and 5G now live in 112 towns and cities
- Strong increase in Consumer FTTP customer base up 60 per cent year on year; fixed and mobile convergence at 21.4 per cent
- Enterprise agrees landmark partnership with Belfast Harbour to deploy 5G Private Network
- Modernisation programme delivers £352 million gross annualised savings at a cost of £163 million
- Revenue relatively resilient at £10,590 million, down 8 per cent.
- Adjusted EBITDA £3,721 million, down 5 per cent, driven by the fall in revenue, partly offset by sports rights rebates, savings from the modernisation programme and other cost initiatives including Covid-19 mitigating actions
- Reported profit before tax £1,062 million, down 20 per cent, driven primarily by reduced EBITDA
Philip Jansen, Chief Executive, commented: “BT delivered financial results in-line with expectations for the first half of the year, thanks to strong operational performance during exceptional circumstances. Customer demand during the pandemic has shown how critical our networks have become, and our significant network investments have helped us double the number of Openreach’s FTTP orders compared to this time last year and have seen our leading 5G network expand to 112 towns and cities across the UK.”
“We continue to invest to make BT more competitive and I’m pleased to see the quality of our products and services improving. At the same time we are firmly on track with the delivery of our modernisation programme and have delivered £352 million in cost savings in the first half of the year.”
“This performance has given us confidence to raise the lower end of our EBITDA outlook range for this year and publish an EBITDA expectation of at least £7.9 billion for 2022/23, with sustainable growth from this level forward. This growth will be driven by the continued recovery from Covid-19, enhanced by sales of our converged and growth products, and by significant savings from our modernisation and cost saving programme. In combination these factors will more than offset legacy product declines.”
“The growth in EBITDA underpins the planned reinstatement of our dividend next year whilst ensuring that we can continue to drive value-creating investments in our networks and products,” he concluded.