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BRITISH TELECOMMUNICATIONS REPORTS SECOND QUARTER RESULTS 1992/93

 BRITISH TELECOMMUNICATIONS REPORTS SECOND QUARTER RESULTS 1992/93
 NEW YORK, Nov. 12 /PRNewswire/ -- British Telecommunications plc (NYSE: BTY BTY.PP), formerly British Telecom now trading as BT, announced today second quarter and half year financial results for the period to Sept. 30, 1992,
 A synopsis is:
 -- Earnings per ADR for the half year decreased by 41.8 percent to 1.01 pounds sterling (US$1.80) after redundancy costs of 442 million pounds (US$787 million) and an exceptional loss of 135 million pounds (US$240 million) taken in the first quarter. Adding back these two items, underlying earnings per ADR decreased by 2.4 percent to 1.71 pounds (US$3.04), relative to the same period last year.
 -- Earnings per ADR for the second quarter decreased by 46.4 percent to 0.45 pounds (US$0.80). Adding back the redundancy costs, underlying earnings per ADR were 0.87 pounds (US$1.55), an increase of 2.4 percent.
 -- Redundancy costs for the half year were 442 million pounds (US$787 million) of which 386 million pounds (US$687 million) were charged in the second quarter.
 -- Income before tax decreased by 36.2 percent to 1,027 million pounds (US$1,828 million) for the half year and decreased by 45.1 percent to 431 million pounds (US$767 million) for the second quarter.
 -- Revenues for the half year were 1.5 percent lower at 6,531 million pounds (US$11,625 million) as a result of the disposal of peripheral businesses in the first quarter. Revenues from BT's continuing activities were virtually unchanged in the half year with an increase of 1 percent in the second quarter.
 -- Call volume growth of 5 percent for international calls and a decline of 1 percent for domestic call volume, on a twelve month moving average.
 -- Access line connections grew by 1.3 percent of businesses and grew by 0.8 percent for residential customers, giving a rise of 0.9 percent overall.
 -- Operating costs, less redundancy costs, were reduced by 0.9 percent in the half year.
 -- Manpower was reduced by 35,300 in the half year of which 28,100 people left under a voluntary early release scheme.
 -- Interim dividend declared of 0.82 pounds (US$1.46) gross per ADR, an increase of 7.9 percent on last year's interim dividend.
 Iain Vallance, chairman of BT, said:
 "The influences of the economy, regulation and competition continued to be evident in these half year results. Revenues were essentially flat, although the first signs of slight improvement may have been perceptible in the second quarter. This, together with firm action to control costs, has enabled a small growth in the second quarter pre-tax profit and earnings per ADR before redundancy charges of 386 million pounds.
 "However, the economic outlook remains uncertain and the tough and challenging pressures of competition and regulation continue.
 "The interim dividend of 0.82 pounds (gross) per ADR represents an increase of 7.9 percent; the board believes this increase appropriately rewards shareholders whilst remaining within prudent cover levels."
 BT's earnings per ADR for the half year to Sept. 30, 1992 were 1.01 pounds (US$1.80) relative to the same period last year. Income before taxation was 1,027 million pounds (US$1,828 million). These results include redundancy costs of 442 million pounds (US$787 million) and an exceptional loss incurred on the disposal of businesses in the first quarter of 135 million pounds. Adding back these two items, the underlying earnings per share for the half year was 1.71 pounds (US$3.04), a reduction of 2.4 percent on the first half of last year.
 Earnings per ADR for the second quarter were 0.45 pounds (US$0.80) compared with the same period last year, and pre-tax income was 431 million pounds ($767 million). Adding back the redundancy cost of 386 million pounds (US$687 million) charged in the second quarter, the underlying earnings per share was 0.87 pounds (US$1.55), an increase of 2.4 percent on the same period last year.
 Domestic call revenues in the half year reduced by 1.1 percent to 2,533 million pounds (US$4,509 million) with international call revenues falling by 5.2 percent to 889 million pounds (US$1,582 million) due to the effects of price reductions introduced for most outgoing calls in September 1991 and reduced incoming calls on major routes more than offsetting volume growth. Transit traffic remains buoyant and there were signs of renewed growth in incoming international direct dialled calls.
 Benefit was seen from management's continuing firm control of costs with operating costs, other than redundancy costs, reduced by 0.9 percent in the half year. Of the 35,300 people leaving the group in the half year, 28,100 left under the voluntary early release scheme, mainly in July. The reduction represented 17 percent of the number employed at the beginning of the financial year. Redundancy payments totaled 575 million pounds (US$1,024 million), of which 133 million pounds (US$237 million) has been set against the restructuring provision established in 1990, leaving 442 million pounds (US$787 million) to be charged against profit for the period.
 The substantial reduction in employee numbers has led to lower staff costs of 3.9 percent in the half year and 8.4 percent in the second quarter. This reduction has been achieved without any significant or lasting adverse effects on the quality of service.
 The board has declared an interim dividend of 0.82 pounds (US$1.46) gross per ADR payable on Feb. 23, 1993 to shareholders on the register on Jan. 4, 1993. This dividend, absorbing 381 million pounds (US$678 million) represents a 7.9 percent increase on last year's interim dividend.
 This release summarizes the attached statement made in London today.
 British Telecommunications plc is the principal supplier of telecommunications services and products in the United Kingdom.
 Results and dividends reporting in pounds sterling have been expressed in U.S. dollars at an exchange rate of $1.78 to the pound, the rate prevailing on Sept. 30, 1992, the last date of the reporting period.
 Each ADR represents ten shares of BT ordinary stock.
 -0- 11/12/92
 /CONTACT: Roy Bliss of British Telecommunications plc, 212-297-2711, or 800-331-4568/
 (BTY) CO: British Telecommunications plc ST: New York IN: TLS SU: ERN


PS-TS -- NY009 -- 0005 11/12/92 08:24 EST
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Date:Nov 12, 1992
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