Investor News

Magyar Telekom second quarter 2023 results

Budapest, August 9, 2023 17:30

Magyar Telekom (Reuters: MTEL.BU and Bloomberg: MTELEKOM HB, hereinafter: Company), the leading Hungarian telecommunications service provider, today reported its consolidated financial results for the second quarter and first half of 2023, in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU (hereinafter: half-year report). The half-year report contains unaudited figures for each reporting period.

Financial highlights:

Financial results


  • Group revenue increased by 14.0% year-on-year in Q2 2023, owing to continued strong demand for mobile data and fixed broadband services coupled with the positive effects of inflation-based fee adjustments implemented in Hungary.
  • Gross profit improved in line with revenue trends, growing 18.7% year-on-year in Q2 2023.
  • Indirect costs grew by 3.6% year-on-year in Q2 2023, owing to the different timing of the supplementary telecommunication tax which offset other increases. Meanwhile, indirect costs increased 22.0% year-on-year in H1 2023, driven by a four-fold increase in electricity costs, an average 7% rise in Hungarian wage expenses, and inflationary pressure impacting other cost items.
  • Consequently, EBITDA AL increased by 33.5% year-on-year in Q2 2023, and by 11.4% year-on-year in the first half of 2023, with the improvement in gross profit offsetting the rise in indirect costs.
  • Net income in Q2 2023 amounted to HUF 22.3 billion, and reached HUF 32.8 billion in H1 2023, reflecting EBITDA growth which was partly offset by a deteriorating net financial result.
  • Adjusted net income was HUF 25.7 billion in Q2 2023 and amounted to HUF 37.8 billion in H1 2023, representing a HUF 12.1 billion increase year-on-year, in line with improvements in underlying profitability.
  • Capex after leases excluding spectrum licenses was down 6.8% year-on-year, amounting to HUF 49.0 billion in H1 2023, as higher spending associated with new fiber connections in Hungary was offset by lower network-related investments in both countries.
  • Capex related to spectrum licenses amounted to HUF 0.6 billion, following the successful acquisition in May 2023 of 2*168 MHz frequency licenses in the 32 GHz frequency band to provide microwave connections. The licenses are valid for 15 years and include an option to extend for a further 5 years provided respective conditions are fulfilled. Spectrum fee amounted to HUF 0.3 billion and the present value of future annual band fees to HUF 0.3 billion.
  • Free cash flow, excluding spectrum license fees, amounted to HUF 7.3 billion in H1 2023, down by HUF 25.1 billion year-on-year. This decrease is the result of a variance in timing of the supplementary telecommunication tax payment. In 2022, this tax was payable in November, whereas in 2023 a payment (including 2022 tax settlement and 2023 advance payment) of HUF 26.4 billion was due in May.

Tibor Rékasi, Magyar Telekom CEO commented:

“Throughout the second quarter of 2023, we continued to navigate an uncertain economic environment while remaining focused on our primary goal of being the ‘number one choice for customers’ by offering seamless connectivity and an outstanding user experience. Our dedication has paid off, and by the end of the second quarter, we successfully reached 1.3 million customers with gigabit connections. Additionally, we met more than 25% higher average mobile data usage compared to the base period. To maintain the highest standard of service and meet our customers’ growing data needs, we continued to progress our multi-year mobile network modernization program and as a next step, we expanded the reach of our 5G service and have already achieved 60% coverage.

The success of our efforts to improve customer service are evident as despite facing cost pressures stemming primarily from the current macro environment, our EBITDA AL grew by 11.4% year-on-year in the first half of 2023.

Looking to the second half of the year, we remain committed to maintaining our solid market positions and operational momentum, allowing us to meet our public targets for Revenue, EBITDA AL and FCF whilst with regards to adjusted net income, we now target to reach a double-digit growth.”

Public targets


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, 2022, available on our website at http://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.