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Invitel Holdings publishes 2Q results

7 Aug 2009

Hungarian alternative telecoms operator Invitel Holdings, formerly Hungarian Telephone and Cable Corp (HTCC), has announced its financial results for the quarter and six months ended 30 June 2009. Invitel posted revenue of EUR81.7 million (USD117.5 million) for the three months to 30 June, down 14% compared to the same quarter last year. Gross profit decreased by 10% over the same period, from EUR68.3 million in 2Q08 to EUR61.4 million a year later. Income from operations remained broadly unchanged at EUR13.8 million for the quarter ended 30 June 2009, while net income attributable to ordinary shareholders was EUR16.7 million, compared to a net loss of EUR18.2 million in 2Q08. The company said the increase from a net loss to net income was principally due to a EUR34.4 million decrease in loss on derivatives compared to the second quarter of 2008.

Invitel Holdings said its Mass Market Voice segment posted a gross profit of EUR16.1 million for the period under review, representing a decrease of 28% compared to the quarter ended 30 June 2008. The fall was blamed primarily on the devaluation of the Hungarian forint against the euro and a 6% decrease in the number of subscribers inside the division’s historical concession areas, as well as a 31% decrease in the number of low-margin carrier select customers outside the historical concession areas. The Mass Market Internet segment reported gross profit of EUR6.7 million in 2Q09, down 15% year-on-year – citing similar currency fluctuation reasons for the fall. Invitel Holdings’ Business segment recorded gross profit of EUR15.4 million for the latest quarter, down 19% y-o-y, again principally attributable to the devaluation of the Hungarian forint against the euro and the renegotiation and retention of certain major contracts. Meanwhile, the Wholesale division reported gross profit of EUR23.2 million for the quarter, representing an increase of 21% compared to the quarter ended 30 June 2008. The increase was primarily due to the increase in segment gross margin of Invitel’s Wholesale Data business – an area not so strongly s affected by the exchange rate fluctuations between the Hungarian forint and the euro.

Commenting on the financial results, Invitel president and CEO Martin Lea

said, ‘We are clearly facing a challenging market in Hungary due to the macroeconomic conditions with Hungary being particularly badly impacted by the recession. This is affecting in particular our Mass Market Voice and Mass Market Internet businesses. Our Business segment activities continue to perform well although this segment too has been impacted by the slow down. On the other hand, our Wholesale business has continued to show good growth driven by the continuing increase in demand for capacity across the region. Management is focusing on carefully managing the operating costs base and capital expenditures during this difficult period.’


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