LONDON (ShareCast) - (Sharecast News) - Telecoms group BT revealed it lost 242,000 broadband customers during the second quarter as it reported a bigger-than-expected decline in revenues over the first half.

Openreach broadband customer losses were driven by heightened competition and a weaker broadband market, with losses worse than the 205,000 decline expected by analysts.

Nevertheless, the company said it saw a record FTTP (Fibre To The Premises) build of 2.2m over the period, taking the FTTP footprint to 20.3m premises. Demand for Openreach FTTP also reached a record with 1.1m net adds during the half, taking total premises connected to 7.6m.

"BT is delivering on its strategy in competitive markets," said chief executive Allison Kirkby. "Since the start of the year, we've driven customer growth across Consumer broadband, mobile and TV and we're stabilising our UK-focused Business division."

However, group revenues totalled £9.8bn, down 3% on the year before and lower than the £9.9bn consensus forecast, due to declines in legacy voice, lower mobile handset trading volumes and declines in international operations, partly offset by an improving FTTP mix in Openreach.

Adjusted earnings before interest taxes depreciation and amortisation (EBITDA) came in at £4.1bn, unchanged from year-on-year and in line with expectations, as strong cost control offset increased costs related to National Insurance and the National Living Wage.

Reported pre-tax profit was down 11% at £862m, driven by higher depreciation and amortisation from a higher asset base, and net finance expense driven by increased interest rates. Capital expenditure during the period totalled £2.4bn, up 8% due to increased FTTP provisioning and build activity.

The company increased its interim dividend by 2% to 2.45p per share, in line with its policy of paying 30% of the prior year's full-year payout.

Looking ahead, the company reconfirmed its full-year targets, with sales expected to fall 1-2% to around £20bn, adjusted EBITDA tipped to be flat at £8.2bn-8.3bn and capex at £5.0bn.

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