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Magyar Telekom issues new guidance

Magyar Telekom expects government spending cuts to shave HUF 5 billion -7 billion off its revenue and EBITDA in 2010, CFO Thilo Kusch said, after the company published its Q2 report.

The government aims to save HUF 20 billion on the management of state-owned assets this year, and this affects IT and telecommunications services too, Kusch said.

Magyar Telekom is committed to achieving growth, he said, adding that new key points could come to the forefront at talks with the government.

“The company's second quarter was not as bad as the first, and a cautious optimism can be felt in the operation of the business as things improved slightly in June and July,” Kusch said. “I can only say this with great caution, but it appears that the worst is behind us,” he added.

Second-quarter net income of Magyar Telekom fell 31.1% to HUF 15.9 billion from the same period a year earlier as revenue fell because of a decline in voice turnover and a cut in centrally-regulated termination fees, the company's consolidated IFRS report for the period shows.

Magyar Telekom CEO Christopher Mattheisen said in the report that the company now targets a 6-8% drop in revenue and a 7-9% drop in EBITDA because of the government spending cuts.

Kusch said revenue from both fixed line and mobile voice services is either falling or stagnating across the telecommunications sector. Magyar Telekom is expanding in some market segments, such as the energy sector and television services, he said, adding that the company wants to become market leader in the latter segment. (MTI – Econews)