--BT Group said it will explore funding additional fiber deployments through a joint venture
--Company is increasing fiber target to 25 million premises by end of 2026, from 20 million
--BT's adjusted earnings and revenue for the fourth quarter fell
By Adria Calatayud
BT Group PLC said Thursday that it will explore funding additional fiber broadband deployments through a joint venture with external parties, as it reported lower adjusted earnings and revenue for the fourth quarter of fiscal 2021.
The U.K. telecommunications group said it is increasing its fiber-rollout target to 25 million homes and businesses by December 2026 from 20 million previously. The company said it will explore joint-venture structures over the first half of the current financial year to fund the additional five million premises.
BT said its Openreach infrastructure arm will accelerate the pace of fiber deployments. Openreach will start its ramp up to 4 million premises a year with immediate effect. Openreach's fiber-to-the-premises network now reaches 4.6 million homes and businesses, after increasing connections by 73% to 905,000 over the last year.
BT said it has the capacity to fund this additional build entirely from internal resources while continuing to stand by its other priorities, but the company believes it could deliver further shareholder value by funding the extra deployments through a joint venture.
BT said adjusted earnings before interest, taxes, depreciation and amortization--the company's preferred metric, which strips out exceptional and other one-off items--for the quarter to March 31 fell to 1.81 billion pounds ($2.55 billion) from GBP2.01 billion for the same period of fiscal 2020.
Adjusted revenue for the quarter fell to GBP5.29 billion from GBP5.63 billion a year before.
Analysts expected BT to report quarterly adjusted Ebitda of GBP1.83 billion on adjusted revenue of GBP5.29 billion, according to consensus estimates provided by the company.
For the fiscal 2021 as a whole, BT reported a pretax profit of GBP1.80 billion, down 23% on year, on revenue that fell 6.9% to GBP21.33 billion due to the impact of the coronavirus pandemic on the group's consumer and enterprise units.
BT said it expects adjusted revenue for fiscal 2022 to be broadly flat and adjusted Ebitda for fiscal 2022 to be between GBP7.5 billion and GBP7.7 billion.
"After a number of years of tough work, and as we look to build back better from the pandemic, we're now pivoting to consistent and predictable growth," BT Chief Executive Philip Jansen said.
The company didn't declare a dividend for fiscal 2021, as previously indicated, but said it expects to resume dividend payments in fiscal 2022 at an annual rate of 7.7 pence a share.
BT also said it has concluded its triennial pension-funding review with an agreement with its pension plan trustee that provides an enduring solution.
Under the agreement, BT will address a pension-funding deficit of GBP7.98 billion at June 30 through an asset-backed funding arrangement of GBP2 billion over 13 years with annual cash payments of GBP180 million, and further annual cash contributions of GBP900 million initially reducing to GBP600 million from July 1, 2024.
"This agreement keeps us on track for zero funding deficit by 2030, whilst ensuring we have the financial capacity to drive our value-enhancing investment opportunities, including in our [fiber to the premises] and 5G rollouts and modernization program," BT Chief Financial Officer Simon Lowth said.
Write to Adria Calatayud at firstname.lastname@example.org
(END) Dow Jones Newswires