Ananova:

Telecoms giant BT has announced pre-tax profits of £547m for the six months to the end of September.

The results represent a 45% decline on the £991m profit it reported last year.

However, the figures have come as a pleasant surprise to the company, which had expected to take a bigger hit in light of the cost of redundancies.

The company has increased its revenue guidance and divendend forecast in reaction to the better than expected profits.

Although full-year revenues are still expected to be down on last year, BT now predicts the fall will be around 3-4%, an improvement on its initial forecast of 4-5%.

BT, which issued two profit warnings last year, said underlying costs had fallen £932m in the first half of this year.

It now expects total underlying cost reductions to be at least £1.5bn for the full year.

BT announced a massive writedown in May and 15,000 job cuts in response to the profit warnings.