Hard times in the City hit BT

Telecommunications titan BT saw underlying earnings grow year-on-year in the April to June quarter despite its corporate customer-focused Global Services unit having a tough time of it in Europe and London's financial district.

Adjusted profit before tax in the first quarter of the group's financial year rose 8% to £574m from £533m the year before. Reported profit before tax rose 13% to £584m from £517mm while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) edged up 2% to £1,463m from £1,436m in the corresponding quarter of 2011.

Revenue fell 6% to £4,484m from £4,763m the year before; excluding transit revenues, where BT connects calls on behalf of other companies, revenue was down 3,2% from a year earlier.

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Ian Livingston, Chief Executive of BT, said that tough conditions in Europe and the financial services market had put a crimp on the performance of the Global Services division, but the BT Retail, BT Wholesale and Openreach divisions all put in good shifts.

BT Global Services saw revenue tumble 9% to £1,730m from £1,905m the year before, while EBITDA fell 14% to £119m from £138m.

BT Retail's revenue dipped 3% to £1,776m from £1,830m in the previous year, but EBITDA rose 7% to £476m from £446m.

BT Wholesale's revenue for the quarter sank below the £1bn mark, to £923m from £1,004m the year before (a fall of 8%), while EBITDA eased 2% to £300m from £307m.

Openreach's revenue was more or less unchanged at £1,257m while EBITDA rose 3% to £553m from £538m.

"We continue to make good progress with our investments in the faster growing economies," Livingston said.

Net debt at the end of June had risen to £9,142m from £8,585m a year earlier.

JH