BT Group PLC said Thursday that pretax profit for the first half of fiscal 2022 fell slightly but brought forward its cost-savings target and said it expects greatly reduced capital expenditure in the coming decade.
The U.K. telecommunications company said that for the six months ended Sept. 30, pretax profit slipped to 1.01 billion pounds ($1.38 billion) from GBP1.06 billion, on the back of higher finance expenses.
Revenue fell 3% to GBP10.31 billion, largely due to revenue decline in its enterprise and global divisions though partially offset by growth in Openreach.
Adjusted earnings before interest, taxes, depreciation and amortization–the company’s preferred profit metric, which strips out exceptional and other one-off items–were GBP3.75 billion, up from GBP3.72 billion for the same period a year earlier.
The company said that lower revenue was more than offset by lower costs from its transformation programs and tight cost management, and lower indirect commissions. The board declared an interim dividend of 2.31 pence a share.
BT also brought forward its fiscal 2025 target of GBP2 billion in gross annualized savings to fiscal 2024, with further savings planned in fiscal 2025, within the expected cost of GBP1.3 billion.
Peak capital expenditure from fiscal 2023 is expected at GBP4.8 billion, from GBP5 billion. Looking past the peak of its fiber build and its move towards an all-fiber, all-IP network, BT expects a capital expenditure reduction of at least GBP1 billion and lower operating costs of GBP500 million.
“From these two factors alone, by the end of the decade we expect an expansion of at least GBP1.5 billion in normalized free cash flow compared to fiscal 2022, and that’s before any benefits from increased revenue and further transformation efficiencies,” Chief Executive Philip Jansen said.