Second quarter profits rise for Matáv, but turnover flat-lines

Hungary’s dominant telecoms service provider Matáv posted net income of HUF16.21 billion for the three months to 30 June 2004, up 14% year-on-year, and at the top end of analysts’ expectations. However, half-yearly profits of HUF30.29 billion were down 8.9% on the year-ago period and total revenues for both H1 and Q2 2004 remained flat, as high growth in mobile and data services was offset by declines in the operator’s domestic fixed line and international revenues. With operating costs increasing by 4.7%, Matáv reported a 14.4% drop in operating income to HUF57.6 billion in the first half of the year, and EBITDA of HUF126.1 billion, down 2.3% on the same period of 2003; the EBITDA margin stood at 42.3%. The telco’s fixed line business saw call traffic revenues fall by 13% thanks to lower traffic levels, the effects of discounting – 55% of all lines were subject to some kind of discount package – and lower interconnection fees. On a more positive note, the unit said that revenues from leased lines and data transmission services rose by 23%; the EBITDA margin for the segment was 36.3%. Matáv’s mobile arm also performed strongly, producing an EBITDA margin of 41.6% in the first six months of the year, thanks in part to a 20% fall in subscriber acquisition costs to HUF10,284 and new tariff packages boosting mobile traffic. But APRU fell to HUF4,923 per month due in part to the introduction of tariff regulations.