Magyar Telekom Q3 profit climbs 42%

Telco

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Magyar Telekomʼs third-quarter after-tax profit jumped 42% year-on-year to HUF 19.3 billion as revenues rose, an earnings report published late Wednesday shows.  Total revenues climbed 9% to HUF 155.4 bln as turnover in both the mobile and fixed-line segments increased, state news agency MTI reported.   

Magyar Telekomʼs direct costs of sales rose 14% to HUF 58.1 bln. Operating profit was up 33% at HUF 30.2 bln.

MTel said the increase in group revenues was driven by strong demand for equipment across all segments and continued growth in mobile data usage. It attributed the increase in fixed-line revenues to a major data project, as well as improved average revenue per user (ARPU) levels for both TV and broadband in Hungary and higher TV set sales volumes.

The companyʼs guidance for full-year revenues of around HUF 580 bln was left unchanged. 

"Whilst we expect the various initiatives we have introduced in both the mobile and fixed-line segments to continue to support our performance, we also anticipate an increase in competitive pressures both in Hungary and Macedonia," said CEO Christopher Mattheisen.

MTel had total assets of HUF 1,105.5 bln at the end of September, down 6% from the end of 2016. Non-current liabilities were practically flat at HUF 316.8 bln.  MTelʼs net debt ratio stood at 37.4% at the end of Q3, according to MTI.

MTel loses 20% of pre-paid subs

The number of Magyar Telekomʼs pre-paid subscribers fell by 20% after a data reconciliation deadline passed in the summer, CFO János Szabó said Thursday, a day after MTel released its Q3 earnings report.

Hungarian lawmakers tightened rules on pre-paid SIM cards last year amid concerns they could be easily resold to criminals or terrorists. The rules required telcos to check and confirm the personal data of all pre-paid subscribers by the end of June.

Szabó said most of the SIM cards that were invalidated were not in use anyway. Revenues were up because of the introduction of per-minute discounts, he added. Post-paid contracts now account for about 60% of MTelʼs subscriber numbers.

Szabó noted that offerings of unlimited data use, as well as the expected entry on the mobile market of DIGI and its acquisition of Invitelʼs retail and small business subscribers, have raised the level of competition.

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