Press Releases

Matáv announces results for first nine months of 1999

Budapest, November 12, 1999

BUDAPEST, November 12, 1999 -- MATÁV (NYSE: MTA.N and BSE: MTAV.BU), the leading Hungarian telecommunications service provider, today reported continued improvements in financial results for the first nine months of 1999.

  • Revenues grew 20.3% (9.7% in USD and 12.7% in EUR terms) year-on-year to 280.3 billion forints, compared to 232.9 billion forints in the first nine months of 1998. Fully competitive business lines produced the highest revenue growth, led by mobile telecommunications services with a 31.9% year-on-year increase and leased lines and data transmission services with a 34.4% increase.
  • EBITDA increased 20.2% year-on-year to 133.8 billion forints compared to 111.3 billion forints a year ago. The EBITDA margin was 47.7% in the first three quarters of 1999 versus 47.8% for the same period in 1998.
  • Net income increased 29.2% (17.8% in USD and 20.9% in EUR terms), to 55.8 billion forints versus 43.2 billion forints in the same period last year, despite the fact that a five-year tax holiday ended in 1998 and MATÁV and Westel 900 began to pay corporate tax at a rate of 7.2%. Net income margin increased to 19.9%, compared to 18.5% in the first three quarters of 1998.
  • Basic earnings per share grew by 29.2% year-on-year to 53.8 forints.

Chairman and CEO Elek Straub, commenting on Matáv's results for the first nine months, said "Our fixed-line voice telephony services continued to see strong growth rates, and we are strengthening our position in the dynamically expanding mobile and data businesses where we operate in fully liberalized markets. GSM subscribers growth was outstanding, and perhaps more importantly we were able to achieve these increases and thereby strenghten our position ahead of the commercial entry of the third GSM provider into the market - while still delivering strong financial performance in the period. Additionally, the recent option agreement with Deutsche Telekom to acquire the remaining 49% interest in Westels, will allow us to invest shareholders' funds back into our mobile position, further securing our long-term prospects for growth and value creation."

The main drivers for top line growth were subscription charges, domestic traffic revenues, mobile revenues and revenues from leased lines and data transmission.

  • The number of fixed lines increased 9.4% year-on-year to over 2,823,000 including ISDN channels. The number of ISDN channels has increased by 67.5% year-on-year to nearly 101,000, showing strong demand for data communications tools. As a result, penetration reached 37.6% at the end of September 1999 compared to 34.2% a year ago. We currently have over 88,000 orders for new lines.
  • Domestic usage growth measured in minutes has outperformed the growth in the number of lines, posting an 11.6% increase year-on-year. The main drivers were residential and ISDN traffic growth.
  • Matáv's 51% owned GSM provider Westel 900 has increased its customer base by 48.2% year-on-year to 737,000. As a result, consolidated mobile service revenues rose by 31.9% year-on-year to 59.6 billion forints. Prepaid customers accounted for 28% of net additions at Westel 900 in the last twelve months, and reached 16% of total GSM subscribers by the end of the period.
  • Growth in data communications remained strong. Revenues from leased lines and data communications surged by 34.4% relative to the first nine months of 1998 to 17.3 billion forints, driven mainly by internet and other data traffic and value-added services. Data and leased line revenues represent 6.2% of Matáv's total revenues.
  • We reduced our headcount by 9.2% year-on-year to approximately 15,600. Staff efficiency has increased 20.9% to 226 lines per employee from 187 a year ago.

MATÁV is the principal provider of telecom services in Hungary and holds the national concession for national and international long distance telephony. MATÁV provides a broad range of services including telephony, data transmission, value-added services, and through its subsidiaries is Hungary's largest mobile telecom provider. Key shareholders as of September 30, 1999 include the Ministry for Transport, Communications and Water Management (holder of the Golden Share), MagyarCom, a consortium of Ameritech International, Inc. and Deutsche Telekom AG (59.53%), while 40.47% is publicly traded.