LONDON, UK: British telecommunications firm BT Group PLC said on Thursday that its net profit for the third quarter of the financial year 2009-10 nearly tripled YoY, helped by strong cost control measures and and improved performance.

The company registered a net profit of £178 million ($227.4) as against the profit of £62 million a year earlier. However, the revenue fell 4 per cent to £5.2 billion from £5.44 billion.

The adjusted EBITDA1 was up 11 per cent at £1,444m, largely due to improvement in BT Global Services. The company said the net debt was down nearly £1 billion compared with last year to £10.1bn.

Commenting on the results, Ian Livingston, BT Group chief executive, said these results show that the company is making progress.

“There is still a lot more to be done but our commitment to improved customer service and cost transformation is starting to deliver results and freeing up resources to invest in our future. In particular, we are one of Europe’s largest investors in super-fast fibre-based broadband and this will bring huge benefits to our customers and the UK,” he said.

Pension woe overshadows results

However, the financial performance is likely to be overshadowed by a looming pension row, according to Reuters.

Along with the financial results, the group also announced the long-awaited results to its triennial pension evaluation, putting the deficit at 9 billion pounds at the end of 2008 and said it had agreed a 17-year recovery plan for the scheme.

Under the plan, it will continue to make deficit payments of 525 million pounds per year for the first three years, as previously announced, and this will hit 533 million pounds per year in real terms for the next 14 years.

But it said the plan would have to be submitted to the pensions regulator for review, which has already indicated it has "substantial concerns" with certain features of the agreement.

"This is a prudent valuation and a recovery plan which re-affirms BT's commitment to meeting its pension obligations," said CEO Ian Livingston. "The operational improvements we are making in the business are generating sufficient cash flow to support the pension scheme whilst allowing us to pay dividends, invest in the business and reduce debt."

Britain's biggest fixed-line telecoms provider has been on a recovery footing since it posted two profit warnings at its key Global Services division, taking out costs and reducing the workforce.

(With inputs from Reuters)