MTel profits slump as govt tax bites

Hungarian telco Magyar Telekom (MTel) says its Q1 net income plummeted sharply to HUF1.7 billion (USD7.53 million) from HUF13.0 billion in the same period a year ago, as new taxes and government-led cuts to energy prices offset any gains in revenues. Reuters reports that the Deutsche Telekom unit was forced to cough up HUF7.3 billion for a new utility tax in the latest reporting period, as its bottom line slumped despite a 6.8% increase in revenues to HUF156.6 billion. Commenting on the latest results, the group’s chairman and CEO Christopher Mattheisen said: ‘Thanks to the outstanding revenue generation in the first quarter and based on my current expectations … I now expect the full year revenues to be approximately flat compared to our previous guidance of flat to [negative] three percent’. First-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA) declined 24.3% y-o-y due to the aforementioned tax charge and energy price cuts. Nonetheless, MTel kept its profit guidance for reported EBITDA to fall by 4%-7% from last year.