MTel shareholders put earnings into profit reserves rather than pay dividend

Telco

Shareholders of Magyar Telekom (MTel), the Hungarian subsidiary of German telecom giant Deutsche Telekom, approved a proposal at an annual general meeting yesterday to place all of last yearʼs profit into profit reserves rather than pay a dividend, Hungarian news agency MTI reported.

MTel had after-tax profit of HUF 36.7 bln last year, according to Hungarian Accounting Standards, MTI said, adding that the companyʼs board decided not to propose a dividend because of a fall in free cashflow last year and to keep the gearing ratio at 30-40%

CEO Christopher Mattheisen told shareholders that the company had held or expanded its market share in all of its strategic markets last year. Revenue rose and churn was "radically reduced" from earlier years, he added.

The CEO acknowledged the impact on MTelʼs performance of the favorable economic environment and government measures that have boosted household consumption.

Shareholders authorized MTelʼs board to buy treasury shares on the bourse for a period of 18 months. Total treasury share stock is not to exceed 10% of registered capital. MTelʼs treasury share stock was just 0.04% of registered capital at the end of March.

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