British telecoms firm BT bounced back into profit during its 2009-2010 financial year after axing 20,000 jobs in a major cost-cutting drive, the group announced on Thursday.
Net profits stood at 1.007 billion pounds (1.18 billion euros, 1.50 billion dollars) in the 12 months to March, BT said in a results statement.
That contrasted sharply with a net loss of 244 million pounds in the previous 2008-2009 fiscal year, when it was plagued by problems at its troubled Global Services unit.
BT said it had slashed 20,000 jobs during the year, with the majority of the cuts falling on agency staff and contractors.
That was 5,000 more than expected and came after it eliminated 15,000 jobs the previous year in a bid to improve profitability. The company currently employs around 128,000 people in Britain.
Annual revenues slid two percent to 20.859 billion pounds, while BT reduced its capital expenditure by 18 percent to 2.5 billion pounds.
"We have made good progress this year and have now set clear objectives for the next three years," said BT Chief Executive Ian Livingston in the earnings release.
"We have improved customer service, are transforming the cost base and have more than doubled free cash flow, but there is still a lot more to do."
The company said earnings before interest, tax, depreciation and amortization (EBITDA) -- a widely-watched industry figure -- rose six percent to 5.781 billion pounds in 2009-2010.
The telecommunications group also outlined plans to roll out high-speed broadband Internet services to two-thirds of British homes by 2015.
Livingston added that BT expected to further improve its performance in the coming years.
"During the next three-year period we expect to improve our underlying revenue trends, and grow EBITDA and free cash flow, while investing in the business, supporting the pension fund, reducing net debt and paying progressive dividends," he said.
"We are on track with our goal of creating a better business with a better future."
The profit turnaround comes after BT overhauled its troubled Global Services division, which provides telecommunications and IT products to large international companies and governments.
In recent years, the Global Services unit had expanded too fast and at the same time its costs sky-rocketed.
BT has also been blighted by concerns about its enormous pension deficit and a fierce recession in Britain. However, the country pulled out of the downturn late last year.