MTel net income up 7.7%

4 Nov 2010

Hungary’s dominant telecoms operator Magyar Telekom (MTel) posted a 7.7% year-on-year rise in net profit for the three months to 30 September to HUF24.5 billion (USD127 million), beating the HUF23.4 billion average estimate of nine analysts polled by Bloomberg. In its IFRS filing MTel, which is controlled by Germany’s Deutsche Telekom, reported a 3.3% y-o-y fall in revenue to HUF154.8 billion, as fixed line turnover dropped 7.8% to HUF62.2 billion and sales from mobile slipped 3.0% to HUF81.7 billion. On a positive note, system integration and IT revenue increased 29.2% to HUF11.0 billion. MTel booked operating costs of HUF113.9 billion in July-September 2010, up 0.7% y-o-y, which impacted on operating profit which declined 6.9% to HUF42.6 billion. Net financial costs however, were 31% higher than for 3Q09, at HUF7.2 billion, yielding a pre-tax profit of HUF35.4 billion, unchanged on the same period of 2009.

Commenting on the group’s results, MTel CEO Christopher Mattheisen said the government’s austerity measures are expected to have ‘a more moderate effect’ on turnover and earnings before interest, tax, depreciation and amortisation (EBITDA) than first thought. His firm intends to pay around HUF27 billion in FY2010 on ‘ad hoc’ (temporary) taxes being levied on domestic telecoms operators and confirmed the company’s plan to trim CAPEX by 10% in FY2010 from FY2009 levels.

In a separate story, MTel’s T-Home unit revealed that as a result of a HUF286 million capital expenditure project it has extended its network to eight new settlements in Szabolcs-Szatmar-Bereg county. From 1 October 2010 T-Home is providing broadband internet, TV and telephony services in eight settlements of the Vasarosnameny region, meaning 4,500 residents can access its broadband network infrastructure there.

Hungary,Magyar Telekom,

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