Tuesday , December 1 2020

Magyar Telekom: growing income, declining profits



Total revenues of Magyar Telekom SA from continuing operations increased by 5.4 percent to HUF 163,8 billion as compared to the same period of the previous year in the third quarter of 2018. Analysts expected a profit of $ 167.9 billion after tax.

According to a report published on Wednesday by the Budapest Stock Exchange, based on International Financial Reporting Standards (IFRS), revenue increased 7.1 percent to HUF 881.1 billion in the first nine months compared to the same period in 2017. Revenues continued to grow mainly due to a strong increase in revenues from the integration of systems and information technologies (RI / IT), higher sales of devices and mobile data transfer.

Net profit after tax decreased by 22.1 percent to HUF 15.1 billion in the third quarter compared to the previous year, after the positive effect of lower tax on profit was offset by lower interest, taxation and depreciation (EBITDA) and rising depreciation costs In the first nine months of the year, gains from continuing operations after tax increased by 12.5 percent to HUF 39.5 billion, thanks to savings on higher EBITDA and income tax.

According to the report, Telekom's EBITDA fell in the third quarter of 2006 by 6.3 percent to HUF6,46 billion, which is due to the combined effect of lower gross margin and slightly higher indirect costs. In the first nine months of this year, EBITDA improved by 2.2 percent to HUF 146.5 billion year-on-year, as both gross margin and indirect costs improved compared to the same period in 2017.

Revenues from mobile telephony increased 5.5 percent to HUF 90.2 billion in the third quarter of 2018. Compared to year-on-year comparisons in the third quarter of 2018, by 5.1 percent, to HUF 251.6 billion in the first nine months of 2018. This is the result of a steady, strong growth in revenue from mobile data and revenues from the sale of products – the report reads. Fixed-line revenues rose 2.5 percent to HUF 50.1 billion in the third quarter and 5.1 percent to HUF 15.1 billion in the first nine months of 2018. The increase was caused by the growing sales of equipment and higher revenues from television and broadband Internet. Revenues from system integration (RI) and IT increased by 19.8 percent to HUF 23.5 billion in the third quarter of 2018, which resulted in a 26.7 percent increase in the first nine months of 2018. Growth in Hungary was still the result of orders for the public sector, while in Macedonia the increase in individual solution designs lags behind.

Telekom expects total annual sales to be around HU 630 billion. The company expects an estimated EBITDA of HUF 190 billion (before interest payment, taxation and depreciation). The report cites Tibor Rékasi, CEO, who said the company maintained good performance in the third quarter of 2018, and all of its business increased again. In Hungary, the demand for mobile data increased, in line with the increase in the number of smart devices on the market. He added that they are still focusing on increasing the high-speed Internet network according to their strategy and have made significant progress towards achieving the goal in 2018. To provide more 300,000 households with high-speed internet.


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