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Higher revenue, HQ sale lift Magyar Telekom profit

Fourth-quarter after-tax profit of Magyar Telekom (MTel) rose 49% year-on-year to HUF 7.7 billion, supported by higher sales and one-off revenue from the sale of the telcoʼs old headquarters, according to an earnings report released late Wednesday, state news agency MTI reported.   

Fourth-quarter revenues rose 9% to HUF 175.1 bln. Direct costs of sales increased at a faster rate, climbing 14% to HUF 82.2 bln. Gross profit rose 4% to HUF 92.9 bln.

Other operating income jumped 149% to HUF 6.2 bln, lifted by the sale of the old headquarters. MTel has since moved into a newly constructed headquarters. EBITDA was up 11% at HUF 46.7 bln.

Chairman-CEO Tibor Rékasi said full-year revenue reached HUF 657 bln, while EBITDA amounted to HUF 193 bln, both outperforming guidance.

"Through our continuous focus on our core business and meeting customer needs, and by constantly refreshing our product offering, we regained or maintained our leading position in all key market segments, including post-paid mobile, TV and fixed broadband," Rékasi said.

He added that the board would propose to shareholders payment of a HUF 25-per-share dividend at an annual general meeting in the spring.

In guidance for 2019, MTel said management expects a "slight decline" in revenue, while EBITDA is seen "increasing at 1%-2%."    CAPEX, excluding spectrum license fees, is set to remain "broadly stable" compared to last yearʼs HUF 92 bln, and free cash flow is expected to increase "about 5%" to over HUF 68 bln. 

The dividend on this yearʼs earnings could be HUF 27 per share, according to the guidance.