Original URL: http://www.theregister.co.uk/2009/11/12/bt_quarter_less_bad/
Redundancy costs dent BT profits
But the cutbacks are working
Posted in Broadband, 12th November 2009 09:22 GMT
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BT's results for its second quarter - ended 30 September 2009 - are not as bad as expected.
The company's aggressive cutting of jobs and costs is working and it was hoping to hit £1bn for the year, having already cut £900m from annual spending. It expects to make free cash flow of £1.6bn compared to previous expectations of £1bn
Revenue for the three months is £5,122m, down three per cent on last year, or six per cent down including currency movements. Operating profit was £550m, compared to £648m last year. Ebitda was £1,436m, up two per cent on last year's figure. Group operating costs were down three per cent to £4,559m and BT spent £21m on redundancy deals.
Chief executive Ian Livingstone said it had been a quarter of progress, but there was still work to do.
BT Global Services made a loss of £96m on sales of £2,024m, down three per cent on the same three months of 2008. Costs at the division were down eight per cent.
BT Retail brought in £2,062m in sales and made an operating profit of £356m.
The Wholesale business made £1,125m compared to £1,168m last year and an operating profit of £158m.
Revenues at Openreach are divided between cash from other divisions and money brought in from outside the firm. External revenue was £299m, compared to £242m last year, while revenue from other BT divisions was £986m compared to £1,061 last year.
The company is raising its dividend for the year by five per cent and is paying an interim divi of 2.3p.
The firm's bottom line had a large hole blown in it last time by BT Global Services, which made a loss of £1.5bn [1] on sales of £2.1bn. The division's boss, Francois Barrault, took home a £2.85m severance package [2]. Some 15,000 other people lost their jobs at BT this year, and the same number will go next year, presumably with slightly less cash in their pockets.
Full numbers here. [3] ®