BT’s bottom line improves

• 3Q pre-tax profit climbs 37% to GBP521 million; revenue manages 1% rise
• Net debt falls by GBP195 million to GBP12.9 billion
• EBITDA climbs by GBP4 million to GBP1.51 billion

Despite only managing a 1% improvement in third quarter revenues to GBP4.7 billion, BT [BT.L] has reported a 37% hike in pre-tax profit to GBP521 million. Chief Executive Ben Verwaayen said that the company had found the task of increasing turnover ‘challenging’, but maintained that the group’s corporate solutions unit BT Ignite achieved record sales in the three month period, bagging a number of large contracts. BT Retail, the company’s residential unit, improved trading profit by 33% to GBP379 million despite fixed network call revenues declining by 2% compared to the previous quarter. BT estimates its share of the residential voice market stood at around 73% at the end of 2002, while that for the business market fell slightly to 44%. The company claimed to have signed up 650,000 broadband customers at 7 February 2003, making its target of a million by mid-year easily attainable.

Concerns over BT’s pension fund have been blamed for the company’s depressed share price recently. BT announced the deficit will be between GBP1- GBP1.5 billion - up from GBP200 million - as falling stock markets have cut the value of investments. Verwaayen estimates a top-up of around GBP200 million a year will be enough to make up the deficit for the foreseeable future.

Source: CIT's Datafile of European Telecommunications