BUDAPEST--Magyar Telekom Nyrt. (MTELEKOM.BU), Hungary's largest
telecommunications company by market share, revised Thursday upward
its revenue estimate for this year after second-quarter net profit
beat analysts' expectations, but left its forecast unchanged for a
fall in earnings before interest, taxes, depreciation and
amortization, or Ebitda.
MAIN FACTS:
- Net profit was 12.21 billion forints ($54.2 million) in the
second quarter of 2013, up 14% from HUF10.68 billion a year
earlier, exceeding the median expectation of analysts for HUF11.53
billion in a poll by Portfolio.hu.
- The firm generated HUF11.71 earnings per share in the second
quarter, compared with HUF10.25 in the same period a year ago.
- Ebitda, a key indicator of business performance in the telecom
sector, rose 0.3% to HUF49.75 billion from a year earlier, beating
analysts' forecast for HUF48.39 billion. The virtually steady
Ebitda reflected improving results for the Hungarian residential
business and that the company was keeping a tight grip on costs, it
said.
- The company further strengthened its market position across
all key segments in Hungary. It minimized churn in the high-margin
fixed, voice segment and limited the erosion in the average monthly
revenue per user, or ARPU, in the mobile business. These
developments underpin the company's strategy of bundling various
services and equipment with core telecommunication services, Magyar
Telekom said.
- Ebitda margin was 31.7%, down from 34.1% in the same period of
last year. The margin decline reflected the increasing contribution
of lower-margin retail energy, equipment sale and system
integration/information technology revenues, which was partially
offset by falling operating costs and taxes.
- The company also highlighted that it has faced falls in its
Ebitda margin in recent quarters, driven by increasing demand for
lower-margin SI/IT services and a strong demand for subscription
plans including mobile equipment. The firm plans to pursue
providing these services in the future since they boost revenues
and support overall profitability.
- Revenues rose 7.9% in the second quarter to HUF156.91 billion
from a year earlier as a result of a significant increase in
revenues both from energy services and mobile equipment sales, of
growing revenues from SI/IT services, and improving underlying
performance at Telekom Hungary.
- Magyar Telekom Chief Executive Christopher Mattheisen now
expects to see revenues rising by an unspecified rate this year
versus his earlier guidance for revenues remaining flat. He
maintained the company's guidance that Ebitda would fall by between
9% and 12% this year and also reiterated the company's expectation
for a 5% drop in capital expenditures excluding any possible
spectrum acquisition costs.
- Magyar Telekom's shares closed unchanged at HUF322 on
Wednesday on the Budapest Stock Exchange.
Write to Margit Feher at margit.feher@wsj.com
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