MTel Q3 profit rises as revenue drops slightly
Magyar Telekomʼs third-quarter net income was up 28.8% at HUF 13.64 bln from the corresponding period of 2015, an earnings report published late yesterday shows, according to Hungarian news agency MTI. Revenue was down 4.7% at HUF 150.6 bln, while EBITDA increased by 10% to HUF 53.80 bln.
Depreciation and amortization costs were up 8.1% to HUF 29.89 bln, but net financial losses were down 4.6% at HUF 6.8 bln, compared to a net loss of HUF 7.14 bln a year earlier.
In a breakdown of revenue, MTel said mobile turnover grew 4.5% to HUF 82.65 bln and fixed-line revenue was down 3.7% at HUF 50.75 bln. Revenue from system integration and IT was down 6.2% at HUF 15.73 bln, while revenue from energy services plummeted almost 84.5% to HUF 1.45 bln. MTel exited the retail gas market in the middle of 2015, but has kept its presence on the corporate energy market.
Direct costs of sales were down 12.1% at HUF 47.25 bln. Personnel costs were down 22.1% at HUF 19.69 bln, while special taxes in Hungary represented a HUF 5.9 bln burden, 6.6% less than a year before.
MTelʼs gross margin was HUF 103.35 bln, down 0.9%, and operating income was HUF 23.91 bln, up 12.5%.
Pre-tax profit soared 20.9% to HUF 17.06 bln, with diluted earnings per share increasing 33.4% to HUF 11.95.
CEO Christopher Mattheisen said that core telco revenues improved during the third quarter, driven by mobile equipment and data revenue growth, as well as an increase in TV revenues. The decline in total revenue was primarily driven by the restructuring of the energy business and a temporary slowdown in EU fund inflows which affected SI/IT revenues.
Magyar Telekomʼs performance in Hungary was supported by the reversal of the EBITDA decline in Macedonia to a 1.9% gain, as the mobile market stabilized. In Montenegro, despite continued regulatory and competitive pressures, the decline in EBITDA decelerated to only 3.8% in Q3, he added.
Mattheisen said the company is raising its 2016 revenue and EBITDA targets to around HUF 595 bln and around HUF 193 bln, respectively. Revenues will continue to be supported by the contribution from residential electricity services, which the company does not plan to withdraw before March 2017. Revenue and EBITDA is expected to be unchanged in 2017 compared to 2016. CAPEX should be down by 10% in both 2016 and 2017.
MTel had total assets of HUF 1,149.0 bln at the end of September, down 4.8% from the same point a year earlier.
Net assets were up 2.7% at HUF 559.8 bln. Net debt stood at HUF 398.6 bln, giving the company a gearing ratio of 41.6%.
Employee numbers dropped by 11.7% to 9,393.
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