MTel Q3 profits fall 12% on higher amortization, depreciation costs


Magyar Telekomʼs third-quarter net income fell 12% to HUF 9.3 bln from the same period a year earlier, an earnings report published late yesterday shows.

Revenue was practically flat at HUF 158 bln and EBITDA was steady at HUF 48.9 bln, but higher depreciation and amortization costs as well as a bigger financial loss weighed on the bottom line, MTel said in the report.

Depreciation and amortization costs rose 11% to HUF 27.7 bln and financial losses widened 8% to HUF 7.1 bln.

In a breakdown of revenue, MTel said mobile turnover fell 4% to HUF 79.1 bln, but fixed line revenue rose 2% to HUF 52.7 bln. Revenue from system integration and IT climbed 17% to HUF 16.8 bln and revenue from energy services was up 8% at HUF 9.4 bln. MTel exited the retail gas market at the end of the previous quarter, but kept its presence on the corporate energy market.

Direct costs of sales edged down 1% to HUF 53.8 bln. Gross margin inched up 1% to HUF 104.2 bln.

CEO Christopher Mattheisen noted that MTel had managed to return to positive Free Cash Flow generation during the quarter, "which will serve as a basis for the resumption of dividend payments on this yearʼs earnings".

He also revised guidance for 2015 EBITDA to an "approximate match" with last yearʼs HUF 181.2 bln, compared to a previous projection of up to a 3% decline.

CAPEX guidance remained at HUF 105 bln.

MTel had total assets of HUF 1.184 trillion at the end of September, down 0.5% from the end of last year. Net assets were up 3.6% at HUF 543.4 bln.

Net debt stood at HUF 425.7 bln giving the company a gearing ratio of 43.9%.


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