HTCC releases Q2 and 1H 2006 financials

10 Aug 2006

Alternative operator Hungarian Telephone and Cable Corp (HTCC) today announced its financial results for the second quarter and six months ended 30 June 2006. In the second quarter the company posted net income of USD5.7 million, compared with USD8.5 million for the same period a year ago, impacted by net foreign exchange losses reported during the period. HTCC reported a net foreign exchange loss of USD8.4 million for the quarter, compared to a net foreign exchange loss of USD0.9 million for the second quarter of 2005, reflecting the devaluation of the Hungarian forint against the euro. Quarterly revenues stood at USD26.8 million, down from 30.7 million in Q2 2005, partly the result of a net decrease in service revenues due to a lower number of access lines and increased competition in the market. Adjusted EBITDA and pro-forma net income were USD12 million and USD2.3 million, down from USD15 million and USD4.8 million respectively in the same period last year. Cash flow from operations in Q2 was USD14 million while CAPEX stood at USD5.4 million for the three month period.

HTCC’s half-yearly results showed a net income from operations of USD13 million and a net loss attributable to common shareholders of USD4.8 million, compared with USD13.9 million and USD0.1 million respectively in 1H 2005. HTCC reported a net foreign exchange loss of USD15.7 million for the six months ended 30 June, compared to a net loss of USD4.5 million a year earlier. Net telephone service revenues reached USD54.2 million, up from USD51.1 million previously, reflecting the inclusion of PanTel’s revenues for the full six-month period (as compared to only four months in 2005). However, the gains were partially offset by lower operating revenues at Hungarotel on the back of a fall in access lines. Adjusted EBITDA and pro-forma net income were USD25.6 million and USD6.2 million respectively, compared with USD24.9 million and USD8.6 million in 1H 2005. Cash flow from operations was USD29.6 million, while CAPEX was USD9.0 million.

According to TeleGeography’s GlobalComms database, HTCC’s 99.9% owned subsidiary Hungarotel was originally a holding company for four local telecoms operators — Hungarotel itself, which provided services in the Bekes region, Kelet-Nograd Com in the Nograd area, Papatel of the Veszprem region and Raba-Com in Vas. They were merged in early 2003, retaining the Hungarotel brand name. In May 2004 HTCC signed a contract with Netherlands-based operator KPN to acquire its 75.2% stake in alternative fixed line operator PanTel for an undisclosed price. Four months later HTCC inked deals with PanTel’s two other shareholders, Hungarian State Railways and PT Invest International LLC, to acquire their respective 10.1% and 14.7% stakes. HTCC closed the acquisition of PanTel in June 2005, adding 32,000 access lines in the process.

Hungary,Invitel (a subsidiary of DIGI), PanTel,

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