BT Group Earnings: Fares Well in 2023; Revenue Increases 2% and EBITDA Up 3%

Once again, we liked how BT Group is doing in a complicated macroeconomic environment. Results were slightly ahead of company-complied consensus expectations and shares are up 5% early on Nov. 2. The consumer and Openreach divisions continue to lift revenue and EBITDA at the group level, which grew 2% and 3% this quarter to GBP 5.3 billion and GBP 2.1 billion, respectively. BT Group and the remainder of U.K. telecommunication companies are doing well in managing inflationary pressures by passing on price increases to customers. Postpaid mobile and consumer broadband average revenue per user grew by 9% and 4% year over year, respectively, with almost no effect on churn rates. The firm is also doing well in keeping operating costs under control, up 2.3% excluding TV program rights for the first 6 months, which we consider satisfactory given the high inflationary environment. We maintain our narrow moat and GBX 200 fair value estimate for BT Group and see the shares as undervalued.