Budapest, May 8, 2014 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 2014, in accordance with
International Financial Reporting Standards (IFRS).
Highlights:
Christopher Mattheisen, CEO commented:
“I
am pleased to report that our Telekom Hungary segment performed well in the
first quarter of 2014, despite the slight contraction of the mobile voice
market which led to a decline in our subscriber base during the period. The
reported increase in both usage and ARPU reflects the success of our continued
efforts to mitigate pressure from rationalization-driven downward migration to
flat rate packages through proactive focus on upward migration and the upsell
of additional data allowance and handset insurance.
In
the fixed segment, we were delighted to see a continued increase in our share
of the TV market, where almost a third of our residential customer base now
subscribes to a triple play package. Despite a decline in SI/IT revenues during
the quarter, the gross margin increased in line with the higher share of service
driven projects within our project mix.
Looking forward, our efforts will be firmly
focused on maintaining the current positive momentum by continuing to deliver a
unique customer experience. To this end, we are currently testing LTE-Advanced
technology that, provided frequency assets are available, will make download
speeds of 300 Mbps possible within a couple of years. We will also continue to
roll out our 4G network which currently covers around 45% of the Hungarian
population.
At
our international subsidiaries we continued to face difficult operating
conditions. In Macedonia, both our mobile competitors launched extremely
attractive promotional flat offers. While our EBITDA margin was slightly above
40% during the first quarter, reflecting some cost saving efforts, we expect
this fierce competition to result in further margin pressure going forward. In
Montenegro, we are facing increased regulatory pressures following the
introduction in April 2014 of fixed voice retail price regulation and the 45%
cut in mobile termination rates that was implemented a month earlier in March.”
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, 2013, 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.