BT to hit earnings targets early

published 3 February 2012

Telecoms giant BT saw profits jump 48% in the third quarter, as the firm announced that it would hit its 2013 earnings target a year early.

"We have delivered another quarter of growth in profits and cash flow despite the economic headwinds," said Chief Executive Ian Livingston.

Pre-tax profits rose from £531m last year to £652m in the three months to December 31st. Over the first three quarters, pre-tax profits totalled £4,455m, up 18% on the previous year.

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Meanwhile, earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 3% to £1,524m in the third quarter. Nine-month EBITDA were 3% higher than last year at £4,455m.

Livingston revealed that BT now expects to achieve its EBITDA target of above £6,000m this year, rather than in 2013.

However, revenue totalled £4,774m in the quarter, down 5% from £5,038m the year before and 3% lower on an underlying basis (which excludes transit). Nine-month revenues are 4% last year at £14,432m, down 1.8% on an underlying basis.

Livingston added: "our investment to support our customers and improve our services has resulted in new contract wins around the world, with orders so far this year up over 50% in Asia Pacific and Latin America. In the UK, our fibre roll-out has accelerated bringing super-fast broadband within reach of over 7m homes and businesses and we remain the number one broadband retailer with over 6m customers."

BT's free cash flow was £1,613m in the nine months to the end of 2011 and the firm expects it to hit £2,400bn by the end of this fiscal year (March 31st 2012).