Magyar Telekom reported on Tuesday Q4 net income of HUF 12.6 billion ($53.97 million) that beat expectations but said its profitability this year would decline due to the economy.
Consolidated net profit for the quarter rose from HUF 0.73 billion a year ago due to lower provisioning for job cuts and came in above an average projection for HUF 7.48 billion of nine analysts in a Reuters poll last week.
The company, a unit a Deutsche Telekom, said its bottom line was also lifted by a 10.2% decline in depreciation costs, which helped mitigate an increase in net financial expenses and corporate tax obligations.
The company said it was difficult to fully assess the impact of the economic downturn in its main markets, however, revenue growth and profitability would likely decline this year due to a tough business environment.
“We are targeting for 2009 a revenue decline of 1% and an EBITDA decline of 1 to 2% compared to the 2008 results,” Magyar Telekom Chairman and CEO Christopher Mattheisen said in the company’s flash report.
Fourth-quarter revenue dropped by 1.6% to HUF 170.2 billion, in line with expectations, as a 25.8% decline in wholesale fixed-line revenue offset a 2.9% quarterly increase in mobile segment revenue.
For the full year, consolidated revenue dropped by 0.5% to HUF 673.1 billion, broadly in line with the company’s guidance for stable top-line performance over last year’s results.
Earnings before interest, tax, depreciation and amortization (EBITDA) rose by 10% to HUF 268.4 billion.
Excluding job cut provisions and the costs on an ongoing contracts probe at the company’s units in Macedonia and Montenegro, full-year EBITDA was up by 1.9%, slightly above its forecast for stable performance year-on-year.
By the end of last year, the company’s gearing dropped to 29.7%, a notch below a 30 to 40% range targeted in its dividend policy.
Magyar Telekom shares finished trade down 2.8% at HUF 524 on the Budapest Stock Exchange on Monday, underperforming a 1.1% decline in the wider market. (Reuters)