Budapest, November 9, 2016 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 third quarter of 2016, in accordance with
International Financial Reporting Standards (IFRS).
Christopher Mattheisen, CEO commented:
“I am pleased to report a 1.2% improvement in our core telco revenues during the third quarter of 2016 driven by mobile equipment and data revenue growth, as well as an increase in TV revenues. The 4.7% decline in our total revenues was primarily driven by the restructuring of our energy business and a temporary slowdown in EU fund inflows which affected SI/IT revenues. Group EBITDA for the quarter grew by 10.0% year-on-year, mainly due to a combination of underlying revenue growth, lower severance related expenses, improving SI/IT gross margin and actual savings from the headcount reduction program implemented over the past two years.
Our performance in Hungary was supported by the reversal of the EBITDA decline in Macedonia to a 1.9% gain, as the mobile market stabilized. In Montenegro, despite continued regulatory and competitive pressures, the decline in EBITDA decelerated to only 3.8% in the third quarter, largely due to our focus on cost efficiency.
The popularity of our 4Play Magenta 1 offer has helped to improve our performance in the high-end segment in both Hungary and international subsidiaries. By the end of September this year, we reached almost 100 thousand Magenta 1 subscribers in Hungary alone. As an integrated service provider, with an integrated IP network and highly valued brand, we are in a very advantageous position to maximise the telecommunication share of household wallet spend through further growth in the number of both 3Play and 4Play subscribers.
Our confidence for the full year is reflected in our decision to raise 2016 revenue and EBITDA targets to around 595 billion and around 193 billion forint, respectively. We no longer expect Digi to enter the mobile market in 2016 whilst household spending power in Hungary is on the rise. Our revenues will also continue to be supported by contribution from residential electricity services, which we do not plan to withdraw before March 2017. We reiterate our CAPEX guidance (excluding any spectrum acquisitions and annual frequency fee capitalization) for 2016 and previously stated targets for 2017.”
|Revenue||HUF 656.3 billion 1||around HUF 595 bn 3||between HUF 585-595 bn|
|EBITDA||HUF 187.3 billion||around HUF 193 bn 4||between HUF 189-193 bn|
|Capex 2||HUF 109.8 billion||ca. 10% y-o-y decline||ca. 10% y-o-y decline|
|FCF||HUF 26.7 billion||-||surpassing HUF 50bn 5|
|Dividend||HUF 15 per share||target HUF 25 per share||-|
1) includes HUF 49.3 billion relating to the energy business
2) excluding spectrum acquisitions and annual frequency fee capitalization
3) increased from HUF 580-590 billion
4) increased from HUF 187-191 billion
5) after minority dividend payments
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, 2015, available on our website at http://www.telekom.hu which 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.