Budapest, November 4, 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 third quarter and first nine months of 2015, in accordance with International Financial
Reporting Standards
(IFRS).
Highlights:
Christopher Mattheisen, CEO commented:
“I am
pleased to report that we have managed to sustain the positive momentum in our
operations. After managing to turn around our revenue, margins and most
latterly EBITDA in recent years, we have also managed to return to positive
Free Cash Flow generation this quarter which will serve as cornerstone for the
resumption of dividend payments after this year’s earnings. We believe that we
have secured our market positions by being a strong integrated fixed and mobile
service provider and continuing the next generation network developments across
all segments. We have launched our Quad-Play offer, called Magenta1 in Hungary
and in Macedonia to maximize the telecommunication share of the household
spending wallet. Whilst at the same time, we have maintained our focus on costs
in order to become a leaner and more efficient company. The headcount reduction
program has continued in Hungary and our strategic goal has not changed with
regard to product and process simplification, including moving more of our
customer servicing online.
Our
EBITDA performance improved by 3% year on year for the first nine months of
this year. It was achieved not only through increasing the gross margin, mainly
as a result of higher revenues and a lower level of bad debts, but also through
achieving significant recurring savings in employee related expenses. This is
even after booking approximately half of the planned one-off Hungarian
severance expense of around 8 billion forints in the third quarter; we expect
to book the second half of this amount in the fourth quarter this year. Looking
ahead to the rest of this year, building on our performance year to date and
the fact that we do not foresee any major changes in the Hungarian mobile
market, we feel comfortable that we will be able to match approximately the
EBITDA reported for 2014. This is an improvement on our previous guidance which
was for up to a 3% decline.
The
Group Capex for the first nine months of 2015 was almost 60 billion forints as we
accelerated the Hungarian fixed High Speed Internet roll-out program, in
conjunction with the continuing PSTN replacement program. However, the vast
majority of the planned next generation fixed access investment is still ahead
of us, so we expect a significant increase in the fourth quarter. Our Capex
guidance for this year remains at 105 billion forints.
In terms
of our Group financial targets, we maintain our revenue and Capex guidance but
now feel sufficiently comfortable to raise our EBITDA guidance to be
approximately in line with what was reported for 2014.”
2015 public guidance
2014 | Public guidance 2015 | |
Revenue | HUF 626.4 billion | roughly stable |
EBITDA | HUF 181.2 billion | roughly stable |
Capex* | HUF 86.8 billion | ca. HUF 105 billion |
*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.