By Margit Feher
BUDAPEST--Net profit of Hungary's largest telecommunications
provider by market share Magyar Telekom Nyrt. rose 8.1% in the
second quarter, more than analysts expected, as a result of rising
revenues driven by system integration, fixed-line
telecommunications services and higher energy sales as well as of
falling losses on financial operations.
Net profit increased to 12.52 billion Hungarian forints ($44.4
million) in April-June from 11.58 billion forints in the same
period a year earlier. The figure was higher than the median
forecast of 10.7 billion forints, according to a poll of nine
analysts by local business news agency Portfolio. That translated
into an earnings of 12.01 forints a share, up from 11.11 forints a
share a year earlier.
Deutsche Telekom AG holds a 59.3% stake in Magyar Telekom.
Some analysts regard Magyar Telekom as the best indicator of
Hungary's economic recovery.
Revenue rose 4.4% to 158.5 billion forints, as fixed-line
revenue was boosted by the consolidation April 1 of recently
acquired alternative telecom provider GTS, a 14% increase in system
integration services sales, and rising power retailing sales while
mobile revenue rose 2% despite a steep cut, mandated by the telecom
authority, to termination fees. Revenue was more than analysts'
expectations for 155.0 billion forints.
Earnings before interest, taxes, depreciation and amortization,
a key indicator of profitability in the telecommunications sector,
increased 5.2% to 52.18 billion forints on a higher gross margin
and savings in employee-related expenses. Ebitda beat analysts'
forecast for 51.4 billion forints.
The Ebitda margin, which analysts watch closely, was 32.9%, up
slightly from 32.7% a year earlier and significantly higher than
27.1% in the previous quarter.
Net financial expenses fell to 6.8 billion forints from 7.8
billion forints on the revaluation of derivatives.
As for Magyar's closely followed foreign subsidiaries, revenue
fell by 5% and Ebitda declined 3% in Macedonia. In Montenegro,
revenue fell 1% and Ebitda declined 7% from a year earlier.
In light of its latest set of earnings, Magyar left its 2015
Ebitda and capital expenditure guidance in place. The company said
February its Ebitda wouldn't fall more than 3% this year and
capital expenditure would total about 105 billion forint. It said
in February that it plans to pay a dividend of at least 15 forint a
share next year from its 2015 net profit. The company has paid no
dividend for the past two years.
Write to Margit Feher at margit.feher@wsj.com
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