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BT PLC on Wednesday reported it benefited from an effective negative tax rate in its first financial half, benefiting from its tax-exempt BT Sport sale.
The telecommunications provider said in the six months to September 30, pre-tax profit fell 9.7% to £968 million from £1.07 billion a year prior. However, post-tax profit surged to £1.03 billion from £494 million.
"The effective tax rate on reported profit was negative 6.4% versus positive 53.9% in the first half-year of financial 2021, reflecting a tax credit recorded against an accounting profit, primarily driven by the impact of the super deduction and the fact that the gain on disposal of BT Sport is exempt from UK tax," BT explained.
In May, BT agreed to a deal with Warner Bros Discovery Inc which would see BT Sport and Eurosport combine. Once complete, the production and operational assets of BT Sport would become a wholly owned subsidiary of Warner Bros. BT would get £93 million from Warner Bros and up to £540 million by way of an earn-out.
Meanwhile, BT's half-year revenue grew 2.8% to £4.99 billion from £4.86 billion. Operating costs fell by 2.2% to £3.70 billion from £3.78 billion.
BT shares fell 2.2% to 120.05 pence each in London on Wednesday afternoon.
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