Magyar Telekom Q1 2008 results

Thursday, May 8th, 2008
Crnogorski Telekom logo

BUDAPEST — Magyar Telekom (BDP:MTELEKOM) today reported its consolidated financial results for the first three months of 2008, in accordance with International Financial Reporting Standards (IFRS).


Revenues before elimination fell by 3.4% to HUF 72.7 bn in Q1 2008 compared to the same period last year, while EBITDA margin was 45.6%.

T-Com Hungary reported a revenue decline of 5.2% to HUF 57.6 bn in Q1 2008. This was driven by decreasing voice revenues, with increasing competition primarily from mobile and cable operators causing a continuous reduction in traffic and average tariff levels. Internet revenues were up by just 2.3% to HUF 12.9 bn, reflecting the slowdown in ADSL customer numbers and the decline in average broadband price levels. The total number of broadband connections was close to 735,000 at end-March 2008, while the aforementioned competition resulted in an accelerated decline in the total number of fixed lines (down 7.1% at end-March 2008 compared to a year ago). Thanks to the headcount reduction and cost discipline, EBITDA was up by 2.1% to HUF 25.4 bn and EBITDA margin was 44.1%.

In Macedonia, revenues increased by 1.0% to HUF 10.3 bn, as higher internet, data and equipment revenues offset the lower voice traffic. Both retail and wholesale voice revenues were down due to increasing mobile substitution and competition from alternative operators. EBITDA increased by 18.2% to HUF 6.1 bn, driven mainly by the sale of Montmak (company owning a Montenegrin property) in February with a net profit of HUF 1.3 bn. EBITDA margin was 59.1% in Q1 2008.

Revenues of T-Com Crna Gora (Crnogorski Telekom) increased by 9.3% to HUF 4.8 bn in Q1 2008. The decline in retail voice traffic was offset by a strong increase in internet, data and wholesale traffic revenues. Thanks to the rapidly increasing broadband market, the ADSL customer base almost tripled, while demand for IPTV services also drove broadband revenues. Wholesale revenue growth was driven by the reclassification of incoming Serbian calls from domestic to international since May 2007. EBITDA tripled due to provisions created last year for employees leaving the company and reached HUF 1.7 bn in the first quarter. EBITDA margin was 35.7% in Q1 2008.

IPTV customers                         Mar 31, 2007  Mar 31, 2008   % change
                                       ------------  ------------   --------
T-Com Hungary                                 1,133        12,883   1,037.1%
T-Com Montenegro (Crnogorski Telekom)             0         9,023       n.a.

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