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MTel H1 profits slip almost 17%

Magyar Telekom’s first-half net income dropped 16.8% to HUF 44.7 billion as revenue fell and financial losses grew, as well as because of a one-off item in the base period, the company said in its consolidated IFRS report for the period published early on Thursday.

Magyar Telekom’s Q2 net income came to HUF 23.2 billion, Econews calculated based on Q1 net income of HUF 21.5 billion. Second-quarter net income was slightly more than the HUF 22.2 billion estimate by analysts in a poll by

First-half revenue dropped 4.5% to HUF 320.5 billion. Fixed line revenue fell 10.3% to HUF 139.7 billion and mobile revenue inched down 0.7% to HUF 158.9 billion. System integration and IT revenue rose 9.4% to HUF 21.9 billion.

Revenue of Magyar Telekom’s unit in Macedonia rose 12.6% to HUF 42.3 billion and operating profit was up 20.6% at HUF 17.0 billion. At its unit in Montenegro, revenue climbed 6.8% to HUF 16.9 billion, but operating profit slipped 5.7% to HUF 2.4 billion.

Magyar Telekom noted that it freed up HUF 8.5 billion in provisions in the base period after telecommunications market regulator NHH decided the company had sufficiently compensated clients for breaching regulations on fixed line to mobile tariffs. Excluding the effect of these freed up provisions, first-half revenue fell 2.1%.

Magyar Telekom brought its total operating costs down 2.7% to HUF 240.4 billion. Direct costs of sales fell 2.4% to HUF 76.3 billion and depreciation and amortization were down 8.4% at HUF 51.0 billion.

Payroll costs were down 0.6% at HUF 48.2 billion, even as headcount rose 2.4% to 10,809.

Costs related to an ongoing investigation of questionable contracts came to HUF 3.6 billion in H1 2009 compared to HUF 3.4 billion in the same period a year earlier.

EBITDA fell 9.2% to HUF 131.1 billion. However, excluding the effect of the freed up provisions, EBITDA was down 4.0%.

Operating profit dropped 9.7% to HUF 80.1 billion.

Financial losses grew 22.5% to HUF 15.3 billion. The net financial losses included interest costs of HUF 17.4 billion.

Pre-tax profit fell 15.7% to HUF 64.7 billion.

Based on first-half results and taking into account the unfavorable economic environment for the second half of the year, Magyar Telekom said it now expects full-year revenue to fall 2% and underlying EBITDA – excluding the freed up provisions related to the fixed line to mobile tariffs – to drop 5%. CAPEX is expected to remain unchanged.

After it published Q1 results, Magyar Telekom had said it would stand by its full-year targets for a 1% decline in revenue, a 1-2% drop in EBITDA and flat CAPEX.

Magyar Telekom’s 2008 revenue was HUF 664.5 billion, EBITDA was HUF 273.7 billion and CAPEX was HUF 103.6 billion.

First-half CAPEX rose 27.1% to HUF 49.2 billion, mainly because of the growing number of satellite television subscriptions and a fiber network rollout.

Magyar Telekom had total assets of HUF 1,163.5 billion on June 30, 2009, 0.5% less than twelve months earlier. Net assets fell 5.1% to HUF 569.5 billion.

Net debt grew 7.7% to HUF 311.9 billion, giving the company a debt-to-equity ratio of 35.4%. (MTI-ECONEWS)