Magyar Telekom reports 1Q revenue/profit gains

12 May 2006

Hungarian incumbent Magyar Telekom reported net profits of HUF18.95 billion (USD92.83 million) in the first quarter of 2006, up 5.5% year-on-year, on revenues of HUF153.28 billion, which were 6.7% higher than the corresponding period of 2005. Q1 net profits were broadly in line with analysts’ estimates, reports Hungarian business news portal, portfolio.hu. The telco’s first quarter EBITDA climbed by 4.9% to HUF62 billion and the EBITDA margin was 40.5%. The operator’s results were buoyed by TCG, its Montenegrin subsidiary, which was consolidated in Q205 and contributed revenues of HUF6.4 billion in the first quarter. Excluding TCG, Q1 revenues rose by just 2.3% year-on-year. Commenting on the results, Magyar president and CEO Elek Straub said: ‘The significant improvement of our results in the first quarter was mainly due to international operations and to our mobile services in Hungary.’

Operating profits for the three-month period climbed 3.2% to HUF32.81 billion, compared with the same period of 2005, while net financial losses rose by 3% to HUF7.74 billion. Operating expenses dropped by 7.7% to HUF120.47 billion and net debt was reduced by HUF18.8 billion to HUF277.8 billion, as a result of loan repayments in Q106. The group’s net debt ratio fell to 30.6% from 33.1% at the end of 2005, and down from 33.3% at the end of March 2005.

The Hungarian operator said it had experienced an 18.8% rise in internet revenues as a result of a significant increase in the number of installed ADSL lines. The total number of broadband connections rose 64.3% to 403,535 at the end of March while the total number of fixed lines fell 5% to 2,724,560. Customised tariff packages accounted for 78% of the total number of lines.

In the mobile market, total revenue from the operator’s wireless arm T-Mobile Hungary increased by 4.1% to HUF65.4 billion in the first quarter of 2006, driven by enhanced service revenues, higher traffic volumes and improved access revenues. EBITDA was HUF26.1 billion, with an EBITDA margin of 39.9%. The cellco’s average subscriber acquisition costs (SAC) fell by nearly 22% year-on-year to HUF6,176, while monthly ARPU was largely unchanged at HUF4,690. T-Mobile Hungary had 4.222 million subscribers at the end of March 2006, up from 4.051 million a year earlier.

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