MTel Q2 net income more than doubles, but tough times ahead

9 Aug 2012

Hungarian carrier Magyar Telekom (MTel) has reported a more than doubling of its second-quarter net profit for the three months ended 30 June 2012 to HUF10.68 billion (USD47.8 million) from HUF4.36 billion in 2Q11, but below market expectations of income of HUF12.05 billion in a poll carried out by local news portal portfolio.hu. The group said its 2011 second-quarter performance was impacted by one-off legal fees of HUF10.60 billion to settle an investigation into some of its contracts (launched by US authorities), but despite not having to contend with that this year, the telco said it needed to raise prices and make spending cuts to improve its underlying profitability in the second half of this year. MTel has seen a fall in returns from its core fixed line and mobile operations as end users have cut their spending due to the weak Magyar economy and higher levels of unemployment.

Group revenues rose 1.3% year-on-year to HUF145.46 billion, bolstered by improved systems integration and energy service revenues, although earnings before interest, taxes, depreciation and amortisation (EBITDA) adjusted for special cost items fell to HUF56.2 billion forints from HUF61.8 billion a year ago, also missing analyst expectations for HUF57.11 billion in the survey.

Hungary,Magyar Telekom,

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