BT profits hit by Global Services
Steady performance though
BT saw its profits for the first quarter ended 30 June 2009 hit by continued poor performance at its Global Services division.
Group revenues grew by one per cent to £5.24bn, although this was actually a three per cent fall when currency movements are factored in. EBITDA was £1.3bn and profit before tax was £272m, compared to £497m in the same quarter of 2009.
BT's troubled Global Services division grew revenue four per cent to £2.08bn, but fell by the same amount when currency moves are included. The division made a loss of £124m in the quarter. BT said it had successfully reduced capital expenditure at Global Services by 47 per cent.
Cost cutting across the group continues - BT said it had cut £357m from operating costs compared to last year.
BT's retail business added 78,000 customers, leaving total customers at 4.8m. It claims 35 per cent of the DSL and LLU market.
The telco also warned that its net pension position on 30 June 2009 was a deficit of £5.8bn compared to just £2.9bn on 31 March 2009. BT blamed this on increasing inflation, which it puts at 3.5 per cent, and a reduction in the discounting rate which wiped out gains the fund made.
BT's full statement is here.
BT's predictions for the year are unchanged - it expects a 4 to 5 per cent fall in revenue. Results for the second quarter are expected 12 November 2009.
The stock market seemed impressed with the results - BT shares are up over seven per cent at the time of writing. ®