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econet.hu racks up H1 losses on seasonality, one-off expenditures

Hungarian IT-com-media company econet.hu racked up H1 consolidated IFRS losses of Ft 68 million compared to profit of Ft 8 million in the same period a year earlier.

Revenue rose 52% to Ft 2.60 billion, the company said in its un-audited H1 report published on Friday.

The company attributed the losses to seasonality as well as one-off expenditures related to the listing of its telecommunications unit Externet and the launch of a new television program guide.

Chairman Csaba Balázs said econet.hu closed an intensive phase of expansion in H1 2008. As a result, the company's full-year revenue will reach Ft 7 billion and after-tax profit will exceed last year's. A big part of revenue as well as profit will be realized in the second half of the year due to the seasonality of the media market and the acquisitions of econet.hu's telecommunications unit closed in the course of the year.

econet.hu closed 2007 with profit of Ft 41 million on revenue of Ft 4.37 billion.

econet.hu's first-half EBITDA dropped Ft 4 million to Ft 152 million from the same period a year earlier. Operating profit rose Ft 4 million to Ft 52 million.

econet.hu's recently acquired 26% stake in music festival organizer Sziget will show in the year-end balance, Balázs told MTI. Sziget is expected to have revenue of Ft 3.5 billion and EBITDA of Ft 200 million – Ft 250 million in 2008.

econet.hu is to raise its stake in Sziget to 51% in Q1 next year, paying Ft 1 billion for the stake with loans and an equity-linked construction, after which it will consolidate the stake. The inclusion of Sziget in the group should boost revenue by Ft 4 billion and EBITDA by Ft 350 million, Balázs said.

Externet's first-half revenue rose 58% to Ft 541 million and EBITDA jumped 50% to almost Ft 198 million from the same period a year earlier because of its acquisitions of TVnet and VIVANET as well as organic growth. The acquisitions raised Externet's subscriber numbers to 50,000.

Asked by MTI, Balázs said econet.hu was prepared to make new acquisitions in either the media or the telecommunications sector.

econet.hu had net assets of Ft 7.15 billion on June 30, 66% more than twelve months earlier. (MTI – Econews)