LONDON (dpa-AFX) - BT Group Plc (BT, BT_A.L) reported Thursday increases in EBITDA - a key earnings measure - for both the fourth quarter and the full fiscal year 2012 and said it expects earnings growth in the next two years despite a challenging environment.
The British telecom giant lifted its dividend and emphasized it achieved its adjusted EBITDA target of above 6 billion pounds a year earlier than targeted.
The Internet service provider has passed 10 million homes and businesses with its fibre roll-out, many months ahead of schedule.
In the fourth quarter, EBITDA increased 4 percent to 1.61 billion pounds. Adjusted pre-tax profit, which excluded one-off items, grew 13 percent year-over-year to 690 million pounds.
Revenue for the quarter fell 4 percent to 4.88 billion pounds from 5.06 billion pounds last year. Underlying revenue, which excludes the low-margin transit revenues, was down 2 percent.
'We are focusing on the trends in underlying revenue excluding transit revenue as transit traffic is low-margin and is significantly affected by reductions in mobile termination rates,' the company reasoned.
For the fiscal year 2012, adjusted EBITDA increased 3 percent to 6.06 billion pounds.
Adjusted pre-tax profit increased 16 percent to 2.42 billion pounds, despite revenues declining 6 percent to 18.90 billion pounds.
Chief Executive Ian Livingston said, 'In what remains a challenging environment we have delivered another year of growth in profits and free cash flow. Our financial strength has allowed us to invest in the business, make a £2bn payment into the pension fund, reward employees and deliver double digit growth in shareholder returns..'
The board proposed a final dividend of 5.7 pence, 14 percent higher than last year, leading to a full year dividend of 8.3 pence, a growth of 12 percent from a year ago.
Looking ahead for the years 2013 and 2014, BT expects underlying revenue excluding transit to show an improving trend and adjusted EBITDA to grow.
Livingston added, 'While we will be impacted by economic and regulatory headwinds, we expect to continue to grow profits over the next two years, with normalized free cash flow growing to above £2.4bn in 2014. We will continue to pursue our prudent financial strategy...'
BT also expects dividends to increase by 10 to 15 percent per year for the next three years.
BT Group is currently trading at 211.70 pence, down 5.50 pence or 2.53 percent in London.
Copyright RTT News/dpa-AFX
© 2012 AFX News
