Wider Margins Lift Magyar Telekom Earnings

Telco

Magyar Telekom's net income climbed 25% to HUF 79 bln in 2023 as margins improved, news agency MTI writes, citing an earnings report published after the closing bell on Thursday.

Revenue rose 14% to HUF 849.4 bln. The direct cost of sales increased just 10%, lifting gross profit by 17pc to HUF 493.1 bln.

Operating profit rose 36% to HUF 148 bln.

Taking into account adjustments -- mainly unrealized losses related to derivatives at fair value -- net income rose 49% to HUF 93.6 bln, MTel said.

MTel's board is proposing shareholder remuneration up to HUF 65.6 bln, including a dividend payment of HUF 41.6 bln on last year's earnings and a share buyback up to HUF 24 bln.

CEO Tibor Rékasi noted that the total remuneration was equivalent to about 70% of adjusted net earnings in 2023.

Looking ahead to 2024, he said MTel expects "some further pressure on profitability stemming from the challenging economic landscape", but put revenue growth at 5%-10%, supported by inflation-linked fee adjustments and strong commercial performance.

With the termination of the utility tax in 2024 and more favorable energy costs, EBITA after leases is set to grow 20%-25%, while adjusted net income is projected around HUF 130 bln, he added.

In a separate announcement, the telecommunications company said its board had approved the extension of Rékasi's contract for another three years, until June 30, 2027.

Chairman Daniel Daub said Rékasi, who was appointed CEO in 2018, had put the company on a growth trajectory and strengthened MTel's position in Hungary in all market segments while improving customer satisfaction and increasing brand value.

"His personal vision is an excellent support to the company's strategic objective: the digitalization of Hungary," he added.

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