MT reports 39.5% rise in Q1 profits, beating market expectations

8 May 2008

Hungarian fixed line incumbent Magyar Telekom (MT) reported first-quarter net income of HUF22.2 billion (USD135.7 million), up 39.5% year-on-year and trumping the average forecast of HUF20.3 billion in a poll of ten analysts conducted by online news portal portfolio.hu. In 2007 MT, which is backed by Germany’s Deutsche Telekom (DT), incurred significant costs relating to a workforce rationalisation programme aimed at cutting staffing levels by 15%. The operator reported first-quarter revenues of HUF162.2 billion, up 0.9% year-on-year, and EBITDA of HUF68.9 billion, an increase of 9.4%. MT said the cost savings arising from its headcount reduction were ‘already visible in the profitability, which was also helped by a HUF2 billion increase in gains on real estate sales in Hungary and Macedonia.’ Revenue growth was driven by the group’s mobile division which reported a 1.9% y-o-y rise in turnover to HUF82.3 billion which counteracted a 3.4% fall in its fixed line business to HUF72.7 billion. Sales from systems integration unit T-Systems contributed HUF18.9 billion in the first quarter, up 5.3% on Q1 2007, it said. Revenues at the group’s Macedonian and Montenegrin subsidiaries climbed by 10.9% and 15.1% respectively, MT said, eclipsing the marginal 0.2% growth recorded in its home market. On a less positive note, monthly ARPU fell 8% in Hungary, 14% in Macedonia and 8% in Montenegro as a consequence of lower tariffs.

Hungary, Magyar Telekom