BT Group Q1 Adj. Pre-tax Profit Rises, Full Year View Unchanged

(RTTNews) - Communications services provider BT Group Plc (BT, BT_A.L) Thursday reported a 16 percent drop in first-quarter pre-tax profit, amid a 1 percent slide in revenue. Adjusted profit before tax rose and the company backed its full year view.

Profit before tax fell to 449 million pounds from 537 million pounds. The prior-year results have been restated.

Specific items resulted in a net charge of 114 million pounds in the quarter, while it was 23 million pounds last year. On an adjusted basis, pre-tax profit was 595 million pounds while it stood at 567 million pounds last year, reflecting the lower depreciation and amortisation and net finance expense.

Profit for the quarter declined to 346 million pounds from 415 million pounds. Earnings per share fell to 4.2 pence from 5 pence.

Revenue slid 1 percent to 4.449 billion pounds from 4.504 billion pounds. Underlying revenue excluding transit was also down 1 percent reflecting the expected impact of regulatory price reductions.

According to the company, the charge controls for WLR, LLU and ISDN30 products impacted revenue in the quarter. BT continues to expect these to have a negative impact of around 120 million pounds on annual group revenue and EBITDA.

BT added 197,000 retail fibre broadband customers, up around 30 percent from last year, and the customer base currently stands at around 1.5 million. The broadband market grew by 189,000 in the quarter, up around 20 percent from last year. Of this, BT's retail share was 50 percent.

In BT Global Services, revenue was 2 percent lower at 1.696 billion pounds, including a 9 million pounds decline in transit revenue and a 27 million pounds positive impact from foreign exchange movements. Total order intake climbed 49 percent to 1.7 billion pounds.

BT Retail revenues were flat with last year at 1.8 billion pounds. Consumer revenue slid 1 percent with a 5 percent decline in calls and lines revenue, being partially offset by 9 percent growth in broadband and TV revenue.

In Openreach, revenue slid 2 percent to 1.245 billion pounds as a result of regulatory price changes on WLR, LLU, ISDN30 and Ethernet products.

Ian Livingston, chief executive, said, ''BT continues to make good progress, delivering another quarter of solid growth in underlying profit before tax. This is despite the impact of regulation and the significant investments we are making for the future.'' Livingston added that the company's consumer line loss is at its lowest level in five years.

BT's outlook for the year is unchanged.

BT-A.L is currently down 1.26 percent at 337.70 pence.BT closed on Wednesday at $52.27 on NYSE.