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
Standards
(IFRS).
Highlights:
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 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
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.