BT Group 9-month Pre-tax Profit Declines; Maintains FY Outlook - Quick Facts

(RTTNews) - Telecom company BT Group plc (BT_A.L, BT) reported Thursday that its profit before tax for the nine months to 31 December 2019 declined to 1.91 billion pounds from last year's 2.09 billion pounds. The results were impacted by upfront interest expense associated with IFRS 16 lease liabilities recognized on 1 April 2019.

Profit after tax was 1.53 billion pounds, compared to 1.65 billion pounds a year ago.

Adjusted EBITDA was 5.90 billion pounds, down 3 percent from last year due to lower revenues, higher spectrum fees, investment in customer experience and higher operating costs in Openreach.

Revenue for the period declined 2 percent to 17.25 billion pounds from 17.56 billion pounds last year, primarily due to ongoing headwinds from regulation, competition and legacy product declines. Adjusted revenue of 17.19 billion pounds was also down 2 percent from last year.

Philip Jansen, Chief Executive of BT Group, said, "BT delivered results slightly below our expectations for the third quarter of the year, but we remain on track to meet our outlook for the full year."

Looking ahead, the company said it is maintaining its financial outlook and expects normalised free cash flow, for timing reasons, to be in the lower half of the full-year guidance range of 1.9 billion pounds to 2.1 billion pounds.

BT Group noted that in January, the National Cyber Security Centre or NCSC issued guidance to UK telecoms operators on the use of certain vendors.

The NCSC stated that certain vendors should be excluded from sensitive 'core' parts of 5G and gigabit-capable networks and limited to a 35 percent presence in non-sensitive parts of the network. The agency added that legislation would be introduced at the earliest opportunity.

BT Group noted that the new guidance will have some impact on its 5G rollout plans and the equipment used in its FTTP network build going forwards. The company is currently reviewing the guidance in detail to determine the full impact on its plans. At this time, the company estimates an impact of around 500 million pounds over the next 5 years.