Budapest, August 7, 2019 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 2019, in accordance with
International Financial Reporting Standards (IFRS).
Financial highlights:
Strategic highlights:
Tibor Rékasi, CEO commented:
“I am pleased to announce that, in H1 2019, positive trends across both the fixed and mobile segments in Hungary and all business segments in North-Macedonia facilitated consolidated moderate revenue and EBITDA growth, despite challenges in the Hungarian Systems Integration and IT (SI/IT) segment. With this performance, we are well on track to meet our guidance for 2019, which assumes a moderate decline in revenues and continued EBITDA growth.
Looking at Q2 2019, specifically, the revenue decline in the quarter is solely due to lower Hungarian SI/IT revenues attributable to a significant reduction in the volume of public sector contracts realized and the absence of a one-off project that was completed in the prior year. We recorded revenue growth across all other segments in Hungary and in North Macedonia during the quarter.
In the Hungarian mobile segment, strong demand for data helped offset the decline in voice revenues and lower equipment sales driven by a temporary slowdown in purchases of Huawei handsets. As long expected, DIGI launched its mobile service in Hungary during the quarter; however, their service offering, and availability remains very limited.
In the fixed segment, the ongoing rollout of our fiber network, which replaces crucial parts of our legacy network with fiber optic, played a key role in facilitating further development of our product offering. We are pleased to report that this has resulted in continued growth of our customer base and broadband ARPU. We were also successful in maintaining momentum in the TV segment, growing both revenues and our customer base. Despite the structural decline in voice revenues, we delivered 3.1% year-on-year fixed revenue growth in Q2 2019.
In line with our strategy, we continued to place strong emphasis on growing our FMC customer base. Even with the recent market changes we are the leading integrated player in the Hungarian market and we are taking full advantage of this position to reinforce our market presence and prepare for future developments in the market. Our Magenta1 offering, introduced in 2018 to deliver highly attractive services and related equipment, remains popular with our customers and supports the sustained growth in our FMC customer base.
Our efforts to further strengthen our online presence are reflected in improved sales and customer service, as we deliver increasingly simple and attractive solutions to our customers.”
Public guidance
2018 Actual | Public Guidance for 2019 2 | |
Revenue | HUF 657 billion | slight decline |
EBITDA | HUF 193 billion | increasing at 1%-2% |
Capex 1 | HUF 92 billion | broadl stable |
FCF | HUF 68 milliárd forint | increasing at ca 5% |
Dividend | HUF 25 per share | HUF 27 per share |
1) excluding spectrum license fees
2) on a comparable basis
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, 2018, available on our website at https://www.telekom.hu which 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.
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