BT Warns of Bigger-Than-Expected Impact From Italian Accounting Scandal
24 January 2017 - 7:06PM
Dow Jones News
By Ian Walker
LONDON--BT Group PLC (BT.A.LN) said a bigger-than-expected 530
million pound ($661 million) write-down related to an accounting
scandal at its Italian business will weigh down on earnings for the
next two years.
BT originally expected to take a charge of GBP145 million.
The charge reduced adjusted revenue and adjusted earnings before
interest, taxes, depreciation and amortization in the three months
to end-December by GBP120 million, BT said on Tuesday. For the year
to end-March, adjusted revenue is set to drop by GBP200 million,
and adjusted revenue would be GBP175 million lower, the company
said. BT added that it expects a similar impact in fiscal 2018.
"The improper behavior in our Italian business is an extremely
serious matter, and we have taken immediate steps to strengthen the
financial processes and controls in that business," BT said.
As part of this the company has suspended a number of BT Italy's
senior management team who have now left the business. BT has also
appointed a new chief executive of BT Italy who will take charge on
Feb. 1.
In its trading statement, the U.K.'s former monopoly operator
said it still expects to increase its yearly dividend by 10%, while
fiscal third-quarter earnings were in line with market expectations
after stripping out the impact of the write-down.
-Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749
(END) Dow Jones Newswires
January 24, 2017 02:51 ET (07:51 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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