MTel profits slump as govt tax bites

8 May 2013

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.

Hungary, Magyar Telekom