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Telecoms giant BT has reported a marginal decline in its earnings over the last quarter, despite ongoing efforts to streamline operations and cut costs.
The news saw the company's shares edge downwards in early trading on Thursday, even as executives described the period as a "solid start" to the financial year.
Under the leadership of Allison Kirkby, who took the helm in 2024, BT is pressing ahead with its cost-reduction strategy and significant investment in fibre broadband infrastructure, aiming to stimulate future expansion.
Shareholders were informed that adjusted earnings for the quarter ending June 30 fell by 1 per cent year-on-year, reaching £2.01 billion.
The group attributed this dip to the progress made in its cost-cutting initiatives being counteracted by reduced margins within its core broadband and voice divisions.
Furthermore, pre-tax profits saw a 4% decrease to £505 million, primarily due to elevated finance costs, though this impact was partially mitigated by lower restructuring expenses.
Openreach broadband lines decreased by 192,000 for the quarter, with losses on track to reach 800,000 for the year (PA Archive)
Meanwhile, revenues across BT were flat at £4.3 billion for the quarter, with a 1 per cent decline in adjusted UK service revenue.
BT said it has been boosted by the growth of its fibre business, with Openreach fibre-to-the-premises adding 574,000 customers in the quarter.
However, it said Openreach broadband lines decreased by 192,000 for the quarter, with losses on track to reach 800,000 for the year.
Ms Kirkby said: “No-one is upgrading and investing in the country’s digital backbone at the scale and pace that BT is.
“We remain on track to deliver our targets, including cash flow of around £2 billion this year and £3 billion by the end of the decade – as we create a better BT, for all of us.”
Duncan Ferris, analyst at Freetrade, said: “BT’s expansion of its fibre network means better monetisation of a network it spent years building.
“It means providers can sell faster and more expensive packages to customers, generating recurring wholesale income.
“In short, the greater the uptake, the better BT’s return on investment.
“But the company’s financials reflect that work is still in progress.”
BT shares were down 0.5 per cent on Thursday.