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Budapest, November 8, 2012 07:00
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 2012, in accordance with International Financial Reporting Standards (IFRS).
Christopher Mattheisen, Chairman and CEO commented:
“In the third
quarter, Magyar Telekom faced increasing recessionary pressures which were
reflected in declining household consumption and reduced business spending.
Despite these headwinds, we have made significant progress in our operational
activities as demonstrated by the growth of our fixed and mobile broadband, TV
and mobile voice customer bases, and the fact that we have maintained our
market position in all segments. These are significant achievements given the
current challenging market environment.
As well as focusing
on retention in our fixed voice business and promoting our interactive TV
service through all our platforms, we continued to exploit the opportunities in
retail gas and electricity services. Since the nationwide launch of our energy service
in April, an encouraging increase in customer numbers has supported this
heightened market demand. In addition to this, our ongoing focus on smartphone
marketing activities resulted in further sales and penetration growth in our
customer base. At the end of September, we further expanded our smartphone
portfolio and were the first operator in Hungary to introduce the new iPhone 5.
Third quarter
underlying EBITDA increased by 5.4% compared to the same period last year, with
a strong EBITDA margin of 44.9%. In Macedonia, we completed an efficiency
review of our real estate assets, selling four of our existing buildings and
purchasing a single modern one, and the sale of our Pro-M subsidiary also
contributed to better EBITDA performance. Moreover, we have begun to realise
the benefits of our widespread and deep cost-cutting measures implemented in
the second half of 2012, which have further contributed to the good results.
I would also like
to highlight the fact that we have reached an agreement with the trade unions
on wage development and headcount reduction at our parent company for 2013.
Based on these measures, our goal is to reduce Total Workforce Management (TWM)
related costs* by HUF 5.8 bn in 2013 compared to 2011, representing a 5.6%
decline over the two year period.
Looking forward to
the rest of the year, although we expect market conditions to remain
challenging, we maintain our revenue target of flat to -2% and an underlying
EBITDA target of a 4-6% decline. Due to the real estate transaction in
Macedonia, we now expect CAPEX to be approximately HUF 90 bn, excluding
spectrum acquisitions in 2012, compared to our previous expectation for flat
CAPEX year-on-year. However, as we are required to pay only the value
difference between the new and old Macedonian buildings, and in six yearly
instalments, the impact on this year’s cash flow is expected to be
insignificant.”
* excluding
severance and capitalized employee expenses
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, 2011, available on our website at https://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, underlying EBITDA, underlying 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.