By Margit Feher
BUDAPEST--Hungary's largest telecommunications company by market
share, Magyar Telekom Nyrt. (MTELEKOM.BU), now expects a smaller
decline this year in earnings before interest, taxes, depreciation
and amortization than it had forecast, the company said as it
released its second-quarter earnings that beat expectations.
MAIN FACTS:
--The company made a net profit of 11.58 billion forints ($49.4
million) in the 2014 second quarter, significantly above the
HUF10.7 billion analysts forecast in a Portfolio.hu poll, and down
from a net profit of HUF12.21 billion a year earlier. The
second-quarter net profit was mostly the result of the broadly
stable Ebitda, while both financial and income tax-expenses
increased.
--Net profit translated into per-share earnings of HUF11.11,
compared with HUF11.71 in the same period last year.
--Ebitda, a key indicator of business performance for
telecommunications companies, was HUF49.61 billion from a year
earlier, exceeding analysts' forecast for HUF48.7 billion, and
little changed from HUF49.75 billion a year earlier. Second-quarter
Ebitda was strong, mainly because of rising gross margins of energy
and system integration and information technology services and a
reduction in employee-related expenses.
--The moderating decline in Ebitda prompted the company to
revise the Ebitda fall it anticipates this year to no more than 3%,
from its earlier guidance of a decline of between 3% and 6% on
2013.
--Second-quarter revenue fell 3.3% to HUF151.79 billion from a
year earlier and was above the HUF151.4 billion expected by
analysts. The decline resulted from lower fixed and mobile voice
revenue and lower revenue from energy services.
--The company left its full-year revenue and capital-expenditure
guidance unchanged. It continues to forecast a revenue drop of up
to 3% from HUF637.5 billion in 2013 on lower growth in retail
energy and equipment sales.
--CFO Janos Szabo will hold an earnings news briefing at 0630
GMT Thursday.
--Deutsche Telekom AG (DTE.XE) holds a 59.3% stake in Magyar
Telekom.
--Magyar Telekom's shares closed down HUF14, or 3.7%, at HUF361
on Wednesday.
Write to Margit Feher at margit.feher@wsj.com
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