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Budapest, May 8, 2013 00:00
Magyar Telekom (Reuters: MTEL.BU and Bloomberg: MTELEKOM HB), the leading Hungarian telecommunications service provider, today reported its consolidated financial results for the first quarter of 2013, in accordance with International Financial Reporting Standards (IFRS).
Christopher Mattheisen, Chairman and CEO commented:
“Our performance in the first quarter of 2013
bears testimony that our strategy, which is based on retention and
cross-selling, is appropriate for the challenging environment that we currently
operate in. The majority of the 6.8% growth in group revenues was derived from
the rapidly expanding non-core telecom businesses such as retail energy, SI/IT
and equipment resale. These businesses, by their very nature, attract lower
margins than traditional telecommunication services, but demonstrably augment
our customer retention rates: fixed voice churn has now decreased to around 3%
per annum while our market share continues to expand in the fixed internet and
TV markets. I am also particularly proud that as the largest player, we have
increased our mobile voice market share to a level not seen since 2004, and
that we have maintained the strong growth momentum of the last two years in
mobile broadband revenues and smartphone penetration. Thanks to the outstanding
revenue generation in the first quarter and based on my current expectations
regarding the environment, I now expect the full year revenues to be
approximately flat compared to our previous guidance of flat to -3%.
Our EBITDA decreased by 24.3% in
the first quarter as opposed to the 4-7% decline targeted for the full year;
however, the principal reason for this underachievement has been the booking in
the first quarter of the full year amount of the utility tax. In addition, the
regulatory changes in the energy market effective from January 2013 led to a negative
energy margin. We are currently still in discussions regarding potential
changes that may allow us to maintain our services in the universal segment.
Based on our current knowledge, we expect our retail energy business to
generate at least 40 billion forint of revenues in 2013.
In
April, the first phase of a large-scale CRM and billing project has just been
successfully installed which, excluding the 900 MHz spectrum license fee that
was accounted for in the first quarter of 2012, led to an increase in our Capex
spending for the current quarter. This next generation system, unique in size
and complexity in Europe’s telecommunications industry, will allow us to
realize further corporate synergy opportunities and seek further improvements
in efficiency and reductions in operating costs once full functionality is
reached by the end of 2014.”
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, 2012, 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.