BT raises profit guidance despite 20% fall in profits

In the latest trading update, BT (LON: BT.A) has reported a 20% fall in half-year profits.

The telecoms giant revealed post-tax profits of £856m – falling from last year’s £1.07bn.

Revenue at the group fell 8% to £10.6bn.

Despite the fall in revenue and profits, BT has raised its full-year guidance to £7.3bn – £7.5bn.

“BT delivered financial results in-line with expectations for the first half of the year, thanks to strong operational performance during exceptional circumstances. Customer demand during the pandemic has shown how critical our networks have become, and our significant network investments have helped us double the number of Openreach’s FTTP orders compared to this time last year and have seen our leading 5G network expand to 112 towns and cities across the UK,” said chief executive, Philip Jansen. 

“We continue to invest to make BT more competitive and I’m pleased to see the quality of our products and services improving. At the same time we are firmly on track with the delivery of our modernisation programme and have delivered £352m in cost savings in the first half of the year.

“This performance has given us confidence to raise the lower end of our EBITDA outlook range for this year and publish an EBITDA expectation of at least £7.9bn for 2022/23, with sustainable growth from this level forward. This growth will be driven by the continued recovery from Covid-19, enhanced by sales of our converged and growth products, and by significant savings from our modernisation and cost saving programme. In combination these factors will more than offset legacy product declines.

“The growth in EBITDA underpins the planned reinstatement of our dividend next year whilst ensuring that we can continue to drive value-creating investments in our networks and products.”

BT shares (LON: BT.A) opened +5% at 107,10. Over the past year shares in the group have fallen almost 50%.