Page 13 - bne_Tech_11_2019

Telecom
November 2019 www.intellinews.com I Page 13
Hungary's leading mobile operator keeps guidance unchanged after Q3 report
After-tax profit of Hungarian telecom operator Magyar Telekom (MTel) fell 10% y/y to HUF13bn (€39.2mn) in January-September 2019 as ac- counting changes offset a small rise in revenue and a modest drop in costs, according to a report on November 6.
In the first nine months, net profit dropped 18.6% to HUF42.3bn. The company kept its guidance unchanged for the year.
Hungary's leading telecommunications service provider saw revenue rise 0.5% y/y to HUF165bn in the July-September period on the back of ris- ing mobile and mobile data revenue, which out- weighed lower revenue in system integration/IT. For the quarter, the company's subsidary in North Macedonia generated nearly 12% of the group's revenue and more than 9% of its Ebitda.
In the first nine months, the company generated HUF484.4bn in revenue, up 0.5% y/y.
In Q3, Ebitda was up 12% at HUF59.6bn, sup- ported by declines in payroll and other operating costs, but the adoption of the IFRS 16 accounting standards have also played a part in the increase.
The bottom line was hit by a net financial loss of HUF8.9bn, 67% more than in base period, and
a 13% rise in depreciation and amortisation to HUF33.8bn.
Direct costs dropped slightly more than 1% to HUF69.3bn. Free cash flow declined despite im- proved profitability due to the payment of the 2100 MHz frequency license extension fee and less favourable changes in working capital.
CEO Tibor Rekasi said Q1-Q3 revenue remained broadly stable at HUF484.3bn, while Ebitda rose 1.9 %, excluding the impact of IFRS 16 adoption. MTel confirmed earlier guidance for a slight de- cline in revenue for the full year from HUF657bn in 2018. Ebitda is seen increasing at 1% -2% from HUF193bn a year ago. Capex, excluding spectrum license fees, is set to remain broadly stable, and free cash flow is expected to increase by about 5%.
The dividend on this year's earnings could be HUF27 per share, according to the guidance.
In the earnings report, MTel took note of the in- creased competition from Vodafone, which ac- quired the cable television operator UPC in Hun- gary earlier this year.
The UK mobile operator announced in May that it has acquired Liberty Global’s operations in Ger- many, the Czech Republic, Hungary and Romania for a combined €18.4bn.
Faced with new competition in the fixed-mobile convergence (FMC) segment MTel has reviewed its offers for clients.