BTPLC Annual Report 2005 - Financial review - Associates and joint ventures

The results of associates and joint ventures are shown below:

	2005 £m	2004 £m		2003 £m

Share of turnover	408	395		1,455

Share of operating (loss) profit before goodwill amortisation and exceptional items	–	(8	)	181

The group’s share of associates’ and joint ventures’ turnover was £408 million during the 2005 financial year. In the 2004 financial year the group’s share of associates’ and joint ventures’ turnover was £395 million, a decrease of £1,060 million over the previous year due to the disposal of the group’s interest in Cegetel in the 2003 financial year.
     The principal contributors to turnover in the 2005 financial year were LG Telecom in Korea (£251 million, 2004 – £196 million) and Albacom in Italy (£97 million, 2004 – £147 million). The principal contributors to turnover in the 2003 financial year were Cegetel in France (£956 million) up to the date of disposal and LG Telecom (£198 million). In February 2005 Albacom became a wholly owned subsidiary of the group when the remaining 74% interest was acquired.
     The group’s share of its ventures’ operating profits before goodwill amortisation and exceptional items was £nil in the 2005 financial year. This compares to a loss of £8 million and a profit of £181 million in the 2004 and 2003 financial years, respectively.
     The principal contributor to the group’s share of operating profits before goodwill amortisation and exceptional items in the 2003 financial year was Cegetel (£198 million).

Exceptional items within the operating (losses) profits from joint ventures and associates are as follows:

	2005 £m	2004 £m	2003 £m

Impairment of assets in joint ventures	25	–	–
Goodwill impairment	–	26	–
Release of exit costs	–	–	(150	)

Total exceptional operating costs (credits)	25	26	(150	)

In the 2005 financial year BT incurred an exceptional impairment charge of £25 million, being BT’s share of a write down of Albacom’s assets prior to Albacom becoming a subsidiary. In the 2004 financial year, BT charged its share of an exceptional goodwill impairment made by Albacom, amounting to £26 million.
In the 2003 financial year BT completed the exit from its investment in Blu on more favourable terms than anticipated and surplus exit cost provisions of £150 million were released.
Goodwill amortisation was £nil in both the 2005 and 2004 financial year, compared to £2 million in the 2003 financial year.

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