Cost cutting boosts BT profits
BT Group grew profits during calendar 2Q, despite revenues dropping 4% during the period – the firm’s fiscal 1Q10.
Profits were up from £214 million (€256 million) in 2009 to £284 million in the recent quarter, as the firm cut operating costs 6% to £4.4 billion
The focus on cost cutting helped the telco boost EBITDA 6% to £1.3 billion, however lower mobile termination income hit group revenues, resulting in the 4% fall to £5 billion in fiscal 1Q10.
A pension deficit of £5.7 billion was unchanged from the March quarter, the firm said.
The firm’s troubled Global Services division cut its operating loss from £124 million in fiscal 1Q10 to £54 million in the recent quarter. The division had caused the firm to issue two profit warnings Forexyard.com reported.
Operating profit at BT Retail of £331 million was broadly in-line with a year ago, while the Wholesale business registered an 11% rise to £185 million.
Chief executive Ian Livingston said the results confirm the telco’s full-year forecasts. “We have made an acceptable start to the year, delivering improved financial results while investing in the future of the business.
“We hit the first major milestone in our fibre roll out, passing over 1.5m premises, and we are now running at an average rate of around 100,000 premises passed every week,” he added.
However, the firm could be left exposed by cuts in government spending in the UK, where it handles 85% of government telecoms services, Bloomberg reported.
The spending cuts prompted UK rival Cable & Wireless Worldwide to downgrade its full year forecasts last week.