Higher revenue, divestment lift MTel earnings


Magyar Telekom (MTel) booked net income of HUF 18.5 billion in the first quarter, more than double the HUF 8.9 bln in the base period, as revenue climbed faster than operating costs, and a divestment lifted the bottom line, an earnings report released after the closing bell on Wednesday shows, state news wire MTI reports.

Revenue increased 8.4% to HUF 175.9 bln. Direct costs of sales climbed at the same pace, reaching HUF 75 bln, but total operating costs rose just 3.5% to HUF 153.2 bln, supported by the impact of reduced headcount on payroll costs.

MTel said it booked a HUF 3.3 bln one-off gain on the sale of its IT unit Pan-Inform in Q1.

Operating profit jumped 77.7% to HUF 26.8 bln.

Earnings per share came to HUF 18.5 for the period.

MTel had net debt of HUF 476.4 bln at the end of March.

CEO Tibor Rékasi said MTel is sticking to its earlier guidance for 2022, while taking into account the "increased level of uncertainty" in the company's external environment.

MTel targets 1-3% revenue growth over the HUF 700.1 bln in 2021. It sees adjusted EBITDA rising 3-5% from HUF 216.3 bln last year.

The company said its management continuously monitors the local economic environment and current market conditions, taking into consideration the termination of the repayment moratorium, the potential economic consequences of the war in Ukraine and the sanctions related to the war, and assesses their impact on group-level operations.

    "Altogether, management has not identified any events which would jeopardize the going concern of the Group's operations, furthermore, based on management's assessment of future cashflows, no major adverse changes are expected in the long term," it added.

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