Weak forint blamed for Matav profit drop

15 Aug 2003

Hungary’s leading telecoms services provider Matav said its profit for the first half of the year fell by 11.9% year-on-year to HUF33.3 billion (EUR134.6 million), largely thanks to ‘a significant increase in net interest charges – due to an increase in FX losses resulting from the weakening of the forint’. The PTO reported that its revenues were up 3.3% to HUF296.9 billion and attributed the gains to higher turnover from mobile, leased lines and data transmission services. Rising demand for enhanced services and higher traffic volumes helped boost mobile revenues by 10.5% and EBITDA rose by 19.2% to HUF47.7 billion; the EBITDA margin for 1H was 39.3%. At the end of the period in review Westel had 3.5 million customers, of which nearly 75% were pre-paid users. On a less positive note, turnover from core domestic and international voice telephony fell by 4.8% to HUF164.5 billion and revenues at its Macedonian subsidiary Maktel were flat.

By the end of June 2003 Matav said fixed line penetration in Hungary stood at 37.9%, down from 39% a year ago, while the total number of lines in service fell by 2.7%. The fall was offset by a 5.7% rise in ISDN channels to nearly 521,000 and by the end of the period 18.3% of the telco’s total fixed lines were ISDN channels. Matav is investing heavily in broadband technology to offset dwindling voice revenues. It reported 57,399 ADSL lines by the end of June, up by 69% from 31 December 2002. Meanwhile, the company’s internet subsidiary Axelero increased its leading position in the dial-up market with a market share of approximately 45%. The Group had a total of 173,083 internet subscribers by end-June 2003.

Hungary,

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