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MTel profit drops as revenue slips in Q2

Telco

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Magyar Telekomʼs second-quarter net income was HUF 11.59 billion, down 14.3% at from the same period a year earlier, an earnings report published late yesterday shows, according to Hungarian news agency MTI.

Revenue was said to be HUF 148.1 bln, down 6.5%, year-on-year, and EBITDA decreased by 2%, to HUF 51.15 bln.

In a breakdown of revenue, MTel said mobile turnover grew 3.8% to HUF 79.7 bln and fixed line revenue was unchanged at HUF 52.66 bln. Revenue from system integration and IT was reported to be down 23.1% at HUF 14.25 bln and revenue from energy services plummeted almost 86% to HUF 1.5 bln. MTel said it left the retail gas market at the middle of 2015, but kept its presence on the corporate energy market. 

CEO Christopher Mattheisen said that, although revenue had fallen, this could be attributed to the companyʼs exit of the retail energy market and a temporary drop in Hungary of the use European Union development funds. 

Mattheisen said the firm expecting around HUF 580-590 bln of revenue in 2016 and HUF 585-595 bln in 2017. The EBITDA goal for this year is HUF 187-191 bln and HUF 189-193 bln for next year. CAPEX should be down by 10% in both 2016 and 2017. 

According to the report:

  • Depreciation and amortization costs were HUF 28.28 bln, up 5.9% year-on-year, but net financial losses was still at HUF 5.9 bln compared to a net loss of HUF 6.81 bln a year earlier.
  • Direct costs of sales were down 19.9% at HUF 44.94 bln. Personal costs were down 4.9% at HUF 21.23 bln, special taxes in Hungary represented a HUF 6.1 bln burned, 5.8% less than a year before. 
  • Gross margin was HUF 103.2 bln, up 0.8%, and operating income was HUF 22.87 bln, down 10.2%. 
  • Pre-tax profit slipped 8.5% to HUF 17.06 bln, diluted earnings per share fell 9.2% to HUF 10.91.  
  • MTel had total assets of HUF 1.1645 trillion at the end of June, down 3.5% from the same period a year earlier.  
  • Net assets were up 0.7% at HUF 548.8 bln. Net debt stood at HUF 404.1 bln, giving the company a gearing ratio of 42.4%. 
  • Employee numbers dropped by 10.3% to 9,590. 

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