MTel profits, revenue fall; telco cuts full-year targets

6 Aug 2010

Hungarian operator Magyar Telekom (MTel) said second-quarter net profits fell 31.1% year-on-year to HUF15.9 billion (USD74.8 million) on revenues that dipped 6.6% to HUF150.5 billion as a result of a fall in voice call volumes and a reduction in regulated termination fees. The Budapest Business Journal said the telco’s net income was below the HUF17.3 billion estimate by analysts in a poll by portfolio.hu. Operating profit dropped 9.4% year-on-year to HUF36.6 billion partly because of a drop in ‘other operating income’. On a segmental basis, turnover from fixed line services fell 10.6% to HUF61.6 billion in the second quarter and mobile revenue was down 4.4% to HUF78.3 billion. On a positive note, sales derived from system integration and IT services inched up 2.3% to HUF10.6 billion. Revenue at MTel’s Macedonian unit fell 8.7% to HUF19.6 billion in Q210 and turnover at its counterpart in Montenegro slipped 10.3% to HUF7.8 billion.

MTel CEO Christopher Mattheisen said his company has revised downwards its EBITDA and revenue targets for 2010 by HUF20 billion in the face of a government plan to cut spending on national asset management, including IT and telecoms services. MTel expects a potential negative impact of between HUF5-HUF7 billion on both revenue and EBITDA, and is forecasting a 6%-8% drop in revenue and a 7%-9% drop in EBITDA, it said. The operator is also cutting its 2010 CAPEX by 10%, when compared to 2009; it previously planned a 5% cut.

Hungary, Magyar Telekom