LONDON: BT Group plc, Britain’s dominant fixed-line phone company, has reported a 38% drop in third-quarter net income compared with the same period a year earlier on modest growth in sales.
However, the previous year’s net income was inflated by a large one-off gain from the sale of property, and BT said its latest quarterly operating profit – a more meaningful measure of its performance – actually showed strong improvement, coming in at £752mil for the three months to Dec 31, 2002. The figure was up 43% from £426mil a year earlier.
BT’s net income for the quarter, however, fell to £445mil from £721mil a year earlier. The 2001 figure had benefited from a non-recurring gain of £1.07bil from the sale and leaseback of telephone exchanges and other properties.
Third-quarter sales excluding discontinued activities rose by a marginal 1% to £4.7bil from £4.66bil previously, but BT strengthened core profits by cutting costs.
It reined in capital expenditure, spending less than expected in the quarter, and reduced interest expense by trimming £195mil off its debts.
“These are excellent results. We are achieving our key goals of improving cash flow, earnings per share and customer satisfaction. These results demonstrate a substantial increase in profitability,” said chief executive Ben Verwaayen.
For the first nine months of the year, BT posted sales of £13.9bil, up from the previous year’s corresponding sales figure, excluding discontinued activities, of £13.7bil.
Its cumulative net income for the period was £1.04bil, compared with £3.59bil previously. – AP
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