BT keeps profits up by cutting costs as revenues fall

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BT keeps profits up by cutting costs as revenues fall

Jennifer Scott

BT has announced profits for the third quarter of 2012, despite making revenue losses across every division.

The telecoms giant reported profits of £842m – up 7% year-on-year – but saw revenues drop 6% to just over £4.5bn for the three-month period.

Each division failed to live up to its 2011 results, with BT Wholesale's revenues declining the most, down 9% compared to last year. Despite securing new orders worth £1.9bn, BT Global Services also saw revenues fall 8% compared with the same period in 2011.

Revenues across the group were hit by two charges of £151m and £36m after Ofcom rulings on Ethernet pricing, though BT plans to appeal the decision.

BT sold its 9% stake in US IT outsourcing firm Tech Mahindra, which added £9m to its quarterly profits.

BT also continued with its restructuring plans, merging BT Innovate & Design and BT Operate into BT Technology, Service and Operations (BT TSO) - responsible for designing, testing and building the firm's global networks - and cutting expenses in the ailing Global Services division.

Broadband numbers were the main highlight of the results announcement. December saw BT overtake Virgin Media to reach the most premises with fibre in the UK, with over 13 million addresses. Take-up numbers rose by 61%, representing 281,000 new customers. New fibre customers - not included in the previous number as some upgraded from existing BT accounts - hit 250,000 in the last three months.

Ian Livingston, CO of BT, chose to focus on this element of the results in his statement.

"Our fibre plans are helping to make the UK a broadband leader in Europe," he 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."

“Our engineers have worked tirelessly following some of the wettest weather on record. Not only did they complete a record number of field visits in the quarter, they also connected a further 281,000 homes and businesses to broadband and helped us grow the number of landlines."

Livingston concluded: “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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