PRE-TAX LOSSES at BT Ireland's main trading company widened to €68 million in the year to the end of March 2007, due to what the directors call "difficult trading conditions".

BT Communications Ireland Limited (BTCIL), one of five trading companies the British telecommunications company has in the Republic, had losses of €53.9 million in its previous financial year.

BTCIL had a turnover of €386 million for its 2007 financial year compared to €381 million the previous year. Chris Clark, chief executive of BT Ireland, said BTCIL's performance "does not reflect our trading position".

He said the accounts only relate to the Republic while BT operates on an all-Ireland basis. According to Mr Clark, the trading company structure had come about due to acquisitions - including its €290 million purchase of Denis O'Brien's Esat Telecom and subsequent acquisitions in the information technology sector.

The widening losses seem to relate to a significant increase in "selling, general and administrative expenses" which increased from €86 million to €110 million.

In a note to the accounts which were recently filed with the Companies Registration Office, BT said this increase was due to increases in specific provisions "such as lease and bad-debt provisions".

Mr Clark said the lease provisions related to the acquisitions BT had made in recent years, while the bad-debt provisions were as a result of the general economic climate at the time.

The retained loss for BTCIL, which was incorporated in March 1989, is now €999 million. The company is the division of BT Ireland which provides retail and wholesale telephone and broadband to the residential and small business markets. BT is the second largest provider of fixed line telephone and broadband services in the Republic after Eircom.

Mr Clark said its network and IT services division, which it has expanded significantly in the last five years, was now the "biggest driver of growth" at the company.

BTCIL had 962 staff in the 2007 financial year compared to 960 the previous year, although its wages bill jumped from €43.4 million to €51.9 million.

A significant line in the make-up of the pre-tax loss relates to payments of €56 million in line rental - the bulk of which is understood to have been paid to Eircom.

Each of BT's Irish trading companies report to the ultimate parent, BT Group, and their financial results are consolidated into their accounts.

BT Group does not provide separate detailed financial figures for its Irish businesses. The most recent guidance it provided was at the time of its third-quarter results announcement. In a statement the company said BT Ireland's performance had been "boosted by broadband growth and enhanced efficiencies", and that profits before interest, taxes, depreciation and amortization had grown by 20 per cent.

According to the BTCIL filing, its immediate parent is UK-registered Extraclick Ltd, a holding company controlled by BT Group.

For the period to the end of March 2007, Extraclick had a pre-tax loss of €31.5 million.