BT sees hit to earnings from economic fallout of COVID-19

LONDON: BT, Britain's biggest broadband and mobile operator, laid out the impact of COVID-19 on Friday, with earnings forecast to drop by up to 9pc this year reflecting the impact of the virus on its small and large business customers.

CEO Philip Jansen said BT had helped keep Britain going during the height of the pandemic, handling a 20pc jump in daytime data as millions worked and schooled at home.

The first quarter was "relatively resilient" in challenging circumstances, Jansen said, with both revenue and core earnings falling 7pc after it offered credit to its BT Sport customers when matches were canceled and enterprises delayed projects.

Jansen said BT, which pulled its dividend in May to help weather the pandemic, now had enough visibility to provide guidance for the year.

"Despite our strong operational performance in the first three months of the year, it is clear that COVID-19 will continue to impact our business as the full economic consequences unfold," he said.

Shares in the group fell 3.5pc to 104 pence by 1020 GMT, not far from an 11-year low of 98 pence set in May.

BT said it expected to produce adjusted core earnings of between 7.2 billion pounds ($9.5 billion) and 7.5 billion for its 2020/21 financial year on revenue down between 5pc and 6pc.

"These financial results and our outlook for the rest of the year demonstrate that BT is a resilient business in a resilient sector," Jansen said. "We have worked tirelessly since the start of lockdown to help the country stay connected."

Analysts had expected full-year earnings of about 7.5 billion pounds on revenue down 5.6pc, according to a company-compiled consensus.

BT also appointed Rob Shuter, chief executive of South Africa's MTN Group, to lead its enterprise unit, replacing Gerry McQuade, who is retiring.