BT Group has reported a 33% drop in profit for the first quarter of 2009, compared to the corresponding period last year, on costs to revamp its BT Global Services.
The company has posted a net profit of £214m in the quarter ended June 2009, down from £382m in the same period a year ago.
The revenue has shown a marginal 1% increase to £5.23 billion when compared to £5.17 billion for the corresponding period last year, boosted by favourable foreign exchange movements of 169m and the impact of acquisitions of £27m. Excluding the impact of these factors, the revenue has recorded a 3% decrease.
Earnings before interest, taxes, depreciation and amortization (EBITDA), before accounting for costs, declined 3% to £1.37 billion from £1.42 billion, due to the costs associated with BT Global Services.
Ian Livingston, chief executive, commenting on the first quarter results, said: “We have made a solid start to the year against a background of challenging trading conditions. BT Global Services is making progress although there is still much to do. The rest of the group continues to perform well generating EBITDA growth of 6%.
“We are on track to deliver reductions in operating costs and capital expenditure of well over £1bn and to generate group free cash flow3 of over £1bn this year.”
The revenue from BT Global Services increased by 4% to £2.07m with foreign exchange movements contributing £154m and acquisitions, £8m. Excluding these factors, revenue decreased by 4%, largely due to the impact of mobile termination rate reductions, lower call volumes in continental Europe and the continued decline in their UK calls and lines business.
BT Retail revenue was down by 2% to £2.11 billion, largely due to reduction in calls and lines revenues. However, the company added 78,000 broadband customers in the quarter taking its total customers count to 4.8 million. The company said that it also expects revenue to decline by 4% to 5% in the current fiscal year.
