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Magyar Telekom Q3 revenue slips, but profit up almost 8%

Magyar Telekom’s third-quarter net income rose 7.7% to HUF 24.5 billion from the same period a year earlier, the telco said in its consolidated IFRS report for the period, published early Thursday.

Though revenue fell and costs inched up, the company’s financial costs were lower and it paid less corporate tax, the report shows.

Net profit was about a billion forints more than the estimate by analysts polled by

Earnings per share came to HUF 23.5 for the period.

Magyar Telekom’s revenue dropped 3.3% to HUF 154.8 billion in Q3 from the same period a year earlier. Fixed line revenue was down 7.8% at HUF 62.2 billion and mobile revenue dropped 3.0% to HUF 81.7 billion. System integration and IT revenue climbed 29.2% to HUF 11.0 billion.

Total operating costs inched up 0.7% to HUF 113.9 billion, causing operating profit to fall 6.9% to HUF 42.6 billion. But the company’s net financial costs fell about 31% to HUF 7.2 billion, bringing pre-tax profit to HUF 35.4 billion, level with that in Q3 2009.

Magyar Telekom paid HUF 6.7 billion in corporate tax in Q3, down 19.4% from the same period a year earlier.

CEO Christopher Mattheisen said government austerity would have a more moderate effect on revenue and EBITDA than earlier thought. The company’s management changed guidance for drops in revenue and underlying EBITDA because of the steps to “closer to 6% in the 6%-8% range and 7% in the 7%-9% range”, respectively. Earlier, revenue was seen falling 6%-8% and EBITDA 7%-8%.

He said the company would pay about HUF 27 billion in 2010 on an ad hoc, temporary tax levied on telecommunications companies.

Mattheisen confirmed the company’s plan to cut CAPEX by 10% in 2010 from 2009 levels.

Magyar Telekom’s cash flow statement shows investments in tangible and intangible assets reached HUF 54.3 billion in Q1-Q3, down 24.1% from the same period a year earlier.

Magyar Telekom’s Q1-Q3 net income fell 15.6% to HUF 56.9 billion from the same period a year earlier as revenue dropped and costs rose.

Earnings per share also fell 15.6% to HUF 54.6 during the period.

Revenue was down 5.8% at HUF 452.6 billion. Fixed line revenue fell 10.1% to HUF 186.2 billion and mobile revenue dipped 3.7% to HUF 234.1 billion, but system integration and IT revenue rose 6.5% to HUF 32.4 billion.

Total operating costs rose 4.1% to HUF 342.3 billion, causing operating profit to fall 10.5% to HUF 112.7 billion.

Pre-tax profit was down 8.9% at HUF 91.2 billion.

Magyar Telekom had total assets of HUF 1,090.6 billion on September 30, 2010, down 6.5% from the end of 2009. Net assets were down 3.7% at HUF 583.3 billion. Non-current liabilities dropped 16.8% to HUF 265.5 billion. (MTI-Econews)