Cost cutting helps BT report a 24% y-o-y rise in net profit in 2Q11

3 Nov 2011

British fixed line incumbent BT has unveiled a 24% year-on-year increase in net profit in its second fiscal quarter of 2011, with the telco reporting a net income of GBP494 million (USD789 million) for the three months ended 30 September 2011. With turnover in the period falling from GBP4.98 billion in 2Q10 to GBP4.48 billion in the same quarter a year later, the increase in net income was partly attributed to lower operating costs and finance expenses, with the telco posting an almost 12% y-o-y drop in operating costs to GBP3.89 billion, while finance expenses fell to GBP698 million in 2Q11, down from GBP808 million in the same quarter in 2010. Adjusted earnings before interest, tax, depreciation and amortisation for the three-month period meanwhile stood at GBP1.49 billion, a 3% y-o-y increase, which the company said reflected the delivery of cost reductions.

In operational terms, BT noted that it had added 166,000 retail broadband subscribers in the three months to end-September 2011, a figure which it said represented 63% of the country’s DSL and local loop unbundled (LLU) market net additions in the period. Further, it said such growth meant that it had increased its lead as the market leader by subscribers, and at the end of the quarter its total broadband subscriber base stood at 5.99 million, up from 5.34 million a year earlier. It also noted that take-up for its fibre-based broadband service, marketed under the ‘Infinity’ brand, remained solid, with 88,000 customers taking out a superfast connection in 2Q11, bringing its FTTx subscriber total to more than 300,000.

Commenting on the results, BT CEO Ian Livingston said: ‘We have increased cash flow, profits and underlying revenue in the quarter. This progress has been supplemented with positive operational performances in most of our businesses.’ The operator also confirmed its full-year growth targets on the back of the results, with Mr Livingston adding: ‘We expect to continue to offset the economic headwinds through improved customer service and processes, better efficiency, and investment in the future of the business. This strategy and our financial results allow us to invest when others are merely talking about it.’

United Kingdom, BT Group (incl. Openreach)