London - Britain's BT cut its
revenue, earnings and free cash flow forecasts for 2017 and 2018
on Tuesday after finding that inappropriate accounting behaviour
in its Italian business went far deeper than previously thought.
BT, which had announced an initial investigation into
historical accounting practices in Italy in October, said a
review had found a complex set of improper sales, purchase and
leasing transactions.
As a result, the size of the write down on the business has
increased from 145 million pounds ($181 million)to around 530
million pounds.
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For 2016/17 it expects a decrease in adjusted revenue of
around 200 million pounds, a decrease in adjusted core earnings
of around 175 million pounds, and a decrease of up to 500
million pounds of normalised free cash flow.
For 2017/18, it expects a similar annual impact to adjusted
revenue and adjusted core earnings.