BT’s Ireland earnings up as group profits fall
Telecoms giant BT has reported a strong rise in first-half earnings at its local operations, despite a 45% drop in group profits.
BT reported pre-tax profits for the six months to September 30 of £547m, down from £991m last year, partly due to the cost of redundancies.
The company has already announced plans to cut 30,000 staff and yesterday |increased its cost-cutting target for the year from £1bn to £1.5bn, prompting fears more jobs may go.
BT also revealed the deficit of its final salary pension scheme has more than doubled over the six-month period, from £4bn to £9.3bn, due to the expected increased cost of providing pensions in future.
However, the company said that “rigorous cost reduction programmes” had resulted in a 21% increase in operating earnings from its business in Northern Ireland and the Republic.
Underlying revenues were down 3% to £397.8m on the same period a year ago, but it said the revenue trend had improved in the second quarter.
Chris Clark, chief executive of BT in Northern Ireland said: “With heightened competition and a tough economic climate, we have delivered a strong set of results by aggressively addressing our cost base to make our company more efficient and sustainable.”
He put the dip in revenues down to competition, a slowdown in broadband growth and lower home phone use in the consumer market, as well as a rise in companies downsizing or cutting costs. This was partly offset by growth in revenues for new technologies.
Mr Clark said he did not anticipate job losses among BT’s 3,000 local staff.
“We have managed to keep our total number of jobs relatively consistent over a number of years. Yes it has reduced through natural wastage and yes we require less people but, having said that, we are bringing work from other parts of BT’s operation into Northern Ireland, protecting the employment base,” he said.
Last week BT announced it was repatriating its contact centre operations from India, which will allow it to retain all four of its local centres and protects 600 jobs.
Mr Clark said BT Ireland had reduced costs by using more audio and visual conferencing to reduce travel costs, optimising its spending on marketing and selling property it no longer needs.
He is also upbeat on the company’s second half prospects. “I expect more of the same. We believe we will see an improvement in the revenue trend and we believe we can continue to improve our profits.”