BT records 7% revenue drop as it issues quarterly trading update

31 Jul 2020

UK-based BT Group has reported revenues of GBP5.248 billion (USD6.84 billion) for the three months ended 30 June 2020, down 7% year-on-year, attributing the drop primarily ‘to the impact of COVID-19, including reduced BT Sport revenue and a reduction in business activity in [its] enterprise units’. The group also reported that adjusted EBTIDA was down 7% on an annualised basis, at GBP1.813 billion, driven by the reduction in revenues, while continued investment in ‘customer experience’ was partly offset by actions taken to mitigate the pandemic and ‘savings from [its] transformation programmes’. Meanwhile, reported profit before tax stood at GBP561 million in the quarter under review, down 13% y-o-y due to reduced EBITDA, higher interest expense, and higher depreciation and amortisation charges (partly offset by the gain on disposal of the group’s Spanish operations). Capital expenditure in the three-month period totalled GBP927 million, broadly flat, with higher network investment offset by lower customer and non-network infrastructure spend.

In terms of BT’s guidance for its current fiscal year ending 31 March 2021, the company said it expects: adjusted revenue to decline by 5%-6%; adjusted EBITDA of between GBP7.2 billion and GBP7.5 billion; and reported capital expenditure of between GBP4.0 billion and GBP4.3 billion.

Among the key strategic developments reported for the quarter, BT highlighted the commitment by network arm Openreach to deploy fibre-to-the-premises (FTTP) technology to 3.2 million homes and businesses by 2025/26. It also noted that Openreach will stop selling copper-based products to around 1.2 million FTTP-enabled premises in 117 exchange areas from June 2021. With regards to current FTTP coverage levels, it was reported that some three million premises in the UK are now passed by Openreach’s FTTP infrastructure, and BT said the unit is on track to increase that figure to 4.5 million by March 2021. Following the UK government’s decision to restrict the use of Huawei equipment in the country’s networks, meanwhile, BT said that it was continuing work to comply with such orders, but said it did not anticipate any impact on its rollout of 5G and full fibre.

United Kingdom, BT Group (incl. Openreach), Openreach