BT hit by softer service and handset sales as Q3 revenue, profit decline

(Sharecast News) - Telecommunications giant BT said on Thursday that thirdquarter revenue and pre-tax profits had fallen year-on-year, as lower service and handset sales and recent disposals weighed on the top line.

BT said revenues had dropped 4% year-on-year to �5.0bn, with adjusted UK service revenue slipping 2% amid continued legacy voice drag and prioryear phasing effects, while adjusted underlying earnings slipped 1% to �2.1bn, broadly flat once last year's oneoff income was excluded. However, it did note that strong costcutting efforts had helped offset its softer revenue performance.

Reported pre-tax profits came to �183m, down �244m year-on-year, principally due to a �214m share of losses from its Sports joint venture with Warner Brosthers Discovery.

BT reported record demand for Openreach fullfibre in the third quarter, with net adds up 21% year-on-year at 571,000, taking total FTTP connections to 8.2m and lifting the takeup rate to more than 38%.

Openreach broadband average revenue per user rose 4% to �16.8, helped by higher FTTP penetration, speed upgrades and price rises, with more than 1m premises passed with FTTP for an eighth consecutive period. BT added that it remains on track to reach up to 5m premises in the current trading year and 25m by December 2026.

Consumer service revenue was flat yearonyear, but BT said it remains on track to return to growth in the second half, while broadband and postpaid mobile ARPU both slipped 1%.

BT added that costcutting efforts continued to deliver savings across the group, offsetting higher National Living Wage and National Insurance costs, with network energy usage down 6% yeartodate, total labour resource falling 7% to 108,000, and Openreach repair volumes dropping 18%.

Looking ahead, BT said it remains on track to meet fullyear guidance, including a cashflow inflection to around �2bn next year and roughly �3bn by the end of the decade.

Reporting by Iain Gilbert at Sharecast.com