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BT posts fall in second-quarter profit

By John-Paul Ford Rojas, Business Reporter
BT has reported a fall in second-quarter profits as it counted the cost of its investment in sports rights and ongoing problems in its troubled global services arm.
The telecoms giant said pre-tax profits for the three months to the end of September slipped by 1% to €666m, while underlying revenues fell 1.5%.
It said earnings took a hit from its investment in sports rights and customer experience, as well as higher pension costs and business rates. Shares fell 2.6%.BT - which is a rival to Sky, the owner of Sky News - screens Champions League and some Premier League football matches.The company, which completed the €12.5bn takeover of mobile operator EE last year, said it added 279,000 contract customers and lost 260,000 in pre-paid, the latter in line with industry trends.It said its number of broadband customers had risen to 20.5 million.BT's global services arm recorded a €34m loss for the period as it wrote down the value of "certain projects" and the division, which serves corporate customers, saw underlying revenues dip 11%.The unit has been hit by the impact of an accounting scandal in its Italian operations, disclosed earlier this year, that resulted in a €530m write-down and a major share price fall.
BT spent another €6m investigating the episode in the first half.The second quarter results left BT's profit for the first half 22% lower at €1.08bn following a 42% slump in the first quarter caused by the scandal.They come a day after Sky News revealed that thousands of BT employees will be told later this month of proposed cuts to their pension benefits as it wrestles with a multibillion-pound pension deficit.The group confirmed that it was to consult with employees shortly over changes to its pension scheme but that this was still under review.Chief executive Gavin Patterson said: "Our first-half results are in line with our expectations as encouraging results in our consumer-facing lines of business, notably EE, helped offset ongoing challenges in our enterprise divisions, in particular global services."Given our underlying business performance, we are maintaining our outlook for the year."
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