BT reports a decline in revenues in Q3, but profits hold up

By John Leonard
01 Feb 2013 View Comments
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Revenues at BT Group dropped in the three months to 31 December 2012, according to a statement  released today, but the firm still managed to produce a profit thanks to cost cutting and lower operating costs.

The statement presented revenues and earnings both for Q3 and also the nine months to 31 December.

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"Whilst improving, our underlying revenue trend continues to be impacted by the tough conditions in Europe and the financial services sector, regulatory price reductions and lower revenue from calls and lines," said the statement.

Total revenues over Q3 were £4.5bn, down six per cent on the figure from 12 months before. Over the nine months to 31 December revenues were £13.47bn, representing a seven per cent year-on-year drop.

However, pre-tax profits were up: seven per cent in Q3 and eight per cent over the nine-month period.

The strongest performing of the group's line-of-business divisions in Q3 was BT Global Services, the telecoms and IT services arm of the business, which saw earnings before interest, taxes, depreciation and amortisation (EBITDA) up by 13 per cent. This reflected a healthy order book with contracts signed with major corporations such as Novartis, KPMG and Visa and public sector entities such as City of Edinburgh and the Public Employment Agency of Spain.

Consumer and small business sales arm BT Retail recorded a fall in revenues of three per cent but a rise in profits of five per cent over the quarter, during which time the company added 122,000 retail customers, according to the statement. However, business revenue decreased by three per cent owing to lower revenues from calls and lines.

BT Wholesale, responsible for the wholesale leasing of PSTN lines, broadband services and other telephony services to retail customers, saw profits drop five per cent, partly as a result of the ongoing impact of broadband lines migrating to local loop unbundling (LLU).

Income at BT Openreach, which manages the local network, was down two per cent in Q3, for which BT blamed regulations controlling pricing.

Commenting on the results, chief executive Ian Livingston said: "More than 13 million premises can access our fibre broadband and we are passing around 100,000 additional premises every week. Take-up is growing strongly with around 1.25 million homes and businesses now enjoying the benefits of faster speeds. This gives us an excellent platform for our push into TV and sport later this year.

"We have made progress in a number of areas and delivered solid financial results. These are in line with our expectations for the year, which remain unchanged."

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