Budapest, August 5, 2015 18:00
Magyar Telekom (Reuters: MTEL.BU and Bloomberg: MTELEKOM HB), the
leading Hungarian telecommunications service provider, today reported its
consolidated financial results for the second quarter and first half of 2015, in accordance with International Financial Reporting
Christopher Mattheisen, CEO commented:
“I am delighted to report that the positive trends in our operations achieved during 2014 have continued into the first half of 2015. Our Group revenues increased by 3.9% compared to the first half of last year, driven by continued improvement in all of our major revenue streams. Our mobile revenue is up by an overall 2% following the Group-wide 4G push. We saw a slight increase in fixed line revenues due to our continued focus on triple play customers and network improvement. System integration and IT revenues grew in every segment, altogether by 11% in line with our strategy. Our EBITDA performance improved by 5% year on year in the first half of this year, thanks to an increase in gross margin and significant savings in employee related expenses. The Group Capex for the first half of 2015 was only 5% higher compared to the same period of 2014, despite the commencement of the Hungarian fixed High Speed Internet roll-out program. However, the vast majority of the planned investment is still ahead of us and we expect a significant pick-up in Capex in the second half of this year.
Drilling down into the details of our operations, both Hungarian segments increased their revenues despite the 76% cut in mobile termination rates effective from April 1, 2015. Revenues at Telekom Hungary for the second quarter were up by almost 4%, driven by a strong fixed line performance and a significant increase in energy revenues driven by the business sub-segment. On the mobile side, strong broadband and equipment sales were almost enough to compensate for the sharp MTR cut. The increase in our contracted mobile RPC was driven by lower churn and higher prepaid to postpaid migration underpinned by strong demand for mobile data. Magyar Telekom’s 4G outdoor population coverage in Hungary has now surpassed 90% penetration which puts us ahead of many of our European peers. We managed to achieve significant growth in both fixed broadband and TV revenues thanks to the ever larger customer bases and higher ARPUs. Higher fixed wholesale and data revenues were largely a reflection of the GTS acquisition. Our focus has remained to offer quality home services on superior networks, as we initiated our extensive High Speed Internet network roll-out program. The erosion in our fixed voice customer base has decreased to less than 1% this quarter thanks to the smart bundling strategy we have executed. Our very good results in the residential and SME sub-segments were coupled with a 3% revenue improvement at T-Systems Hungary. We won a couple of large projects within the government and healthcare segments, resulting in a HUF 2 billion increase in system integration and IT revenues, which more than helped to offset revenue weakness in telco, which was principally for regulatory reasons.
Concerning our foreign operations, the merger of T-Mobile Macedonia and Makedonski Telekom has been approved. Our revenue fell by 5% and EBITDA decline was 3% in forint terms. As the mobile market continues to show signs of stabilization, the competition office approved the merger of the country’s other two mobile players into one integrated player, as both of them had previously acquired fixed line assets. In Montenegro, a steep increase in SI/IT revenues almost compensated for the decline in messaging and prepaid mobile revenues, which when combined with the continuing regulatory pressures within fixed voice and broadband, resulted in a marginal decline of 1% in overall revenue and a 7% drop in EBITDA.
In terms of our Group financial targets, we maintain our revenue, EBITDA and Capex guidance.”
2015 public guidance
|2014||Public guidance 2015|
|Revenue||HUF 626.4 billion||roughly stable*|
|EBITDA||HUF 181.2 billion||0-3% decline|
|Capex**||HUF 86.8 billion||ca. HUF 105 billion|
*modified from 0-3% increase
** excluding spectrum acquistions and annual frequency fee capitalization
This investor news contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should not have undue reliance placed upon them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors are described in, among other things, our annual financial statements for the year ended December 31, 2014, available on our website at http://www.telekom.huwhich have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and adopted by the European Union.
In addition to figures prepared in accordance with IFRS, Magyar Telekom also presents non-GAAP financial performance measures, including, among others, EBITDA, EBITDA margin and net debt. These non-GAAP measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with IFRS. Non-GAAP financial performance measures are not subject to IFRS or any other generally accepted accounting principles. Other companies may define these terms in different ways. For further information relevant to the interpretation of these terms, please refer to the chapter “Reconciliation of pro forma figures”, which is posted on Magyar Telekom’s Investor Relations webpage at www.telekom.hu/investor_relations.