MTel Q3 profit climbs as financial loss narrows


Magyar Telekom's third-quarter net profit rose 9% to HUF 11.8 bln from the same period a year earlier, climbing as financial losses fell, an earnings report published Thursday shows. Operating profit fell 1% to HUF 24.2 bln but pre-tax profit climbed 15% to HUF 17.6 bln as financial losses narrowed more than one-quarter to HUF 6.6 bln.

Net profit was slightly over the HUF 10.6 bln estimate by analysts polled by

Earnings per share came to HUF 10.

Revenue edged down half a percent to HUF 157.5 bln during the period. Mobile revenue was up 3% at HUF 82.3 bln but fixed line revenue dropped almost 2% to HUF 52.1 bln. Turnover from system integration and IT declined 13% to HUF 14.4 bln. Revenue from the company's non-core energy services rose 1% to HUF 8.7 bln.

Direct costs fell more than 1% to HUF 54.4 bln.

EBITDA was down about 5% at HUF 49.2 bln, which CEO Christopher Mattheisen attributed to higher severance costs.

Payroll costs were up 12% at HUF 25.9 bln on the profit and loss statement.

MTel left its guidance for full-year EBITDA unchanged at "up to a 3% decline" over the HUF 179.5 bln in 2013. Revenue is also set to fall "up to 3%".

CAPEX is set to reach HUF 87 bln, excluding spectrum the company acquired in the autumn. MTel said in September that it would pay HUF 58.7 bln for the packages and capitalise HUF 36.8 bln for the present value of the future annual band fees related to the frequencies.

MTel had net debt of HUF 418.4 bln at the end of September, according to the earnings report. It noted the amount reflected the payment for the new frequencies but not the capitalisation for the annual band fees. MTel's net debt ratio rose to 44.6%.

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