Magyar Telekom Q4 net income down on job cuts expenses

Hungarian former fixed line monopoly Maygar Telekom (MT) has reported a 95% year-on-year fall in net profits for the period ending 31 December 2007 to HUF755 million (USD4.2 million), down from HUF16.4 billion a year ago, largely the result of a HUF19 billion charge relating to redundancy payments. In a filing with the Budapest Stock Exchange, MT said quarterly revenue also dipped to HUF173.1 billion, from HUF176.7 billion in the same period of 2006. In October last year the company’s CEO Christopher Mattheisen announced he was looking to oversee a 15% cut in the operator’s workforce in 2008 to combat declining revenues at the business – particularly from its core fixed voice telephony products. Sales of landlines are falling as fixed-mobile substitution gathers momentum in the country. Sales were also adversely impacted by the one-off impact of an accounting revision to its EDR-Tetra mobile telephone project. Fourth-quarter EBITDA was HUF40.9 billion and operating profit stood at HUF11 billion, beating analysts’ forecasts of around HUF39.90 billion and HUF10.8 billion respectively. MT’s EBITDA margin was also down year-on-year from 40.3% to 36%.