MTel reports 5.8% rise in Q3 net profits

6 Nov 2008

Hungarian telecoms group Magyar Telekom (MTel) reported third-quarter net income of HUF26.7 billion (USD133.3 million), up 5.8% on the same period of 2007, aided by a reduction in depreciation and amortisation costs and lower taxes, which helped minimise a drop in consolidated EBITDA. The incumbent’s third-quarter net income beat consensus estimates of HUF23.4 billion in a poll conducted by portfolio.hu.

MTel said revenues for the three months to 30 September 2008 declined by 4.6% year-on-year to HUF167.1 billion, largely the result of falling retail fixed line turnover in the face of continuing mobile substitution. The group also noted a dip in mobile revenues due to lower termination charges, increased competition in foreign markets where it operates and unfavourable exchange rate fluctuations. Consolidated EBITDA fell 6.4% to HUF69.5 billion on the back of the drop of revenue; the EBITDA margin was 41.6%. MTel’s T-Com-branded fixed line division posted a 6.8% y-o-y fall in sales to HUF71 billion, of which HUF56.7 billion was generated in its home market, down 6.8%, due to falling voice sales and competition from cable and mobile rivals. Internet turnover also dropped marginally due to slowing broadband subscriber growth and falling prices. Revenue from MTel’s mobile division fell 2.5% to HUF89.7 billion yielding an EBITDA margin of 44.9%. In its home market, mobile turnover was 0.6 percentage points lower at HUF72 billion as a rise in the subscriber base and increased revenue from value added services failed to offset a fall in wholesale revenue following a cut in mobile termination rates.

Hungary,Magyar Telekom,

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