By Margit Feher
BUDAPEST--Magyar Telekom Telecommunications PLC (MTELEKOM.BU),
Hungary's largest telecommunication company by market share, saw
its first-quarter net profit more than double from a year earlier
as a result of rising earnings before interest, taxes, depreciation
and amortization, and lower financial expenses, beating analysts'
expectations.
Magyar Telekom reported a net profit of 4.83 billion forints
($21.8 million) in the first quarter, significantly above the HUF3
billion forecast by analysts in a Portfolio.hu poll, and a net
profit of HUF1.7 billion a year earlier.
The net profit translated into earnings of HUF4.63 a share,
versus HUF1.63 a share over the same period last year.
Earnings before interest, taxes, depreciation and amortization,
which analysts consider a key indicator of business performance for
telecommunications companies, increased 3.8% in the first quarter,
to HUF40.53 billion, from a year earlier, mainly on rising gross
margins across all businesses, but particularly in relation to
energy, system integration, and information technology services.
Analysts had forecast first-quarter Ebitda at HUF39.65 billion.
Net financial expenses decreased to HUF6.0 billion, from HUF7.7
billion a year earlier. The improvement was mostly due to a
substantially lower net foreign-exchange loss.
Magyar Telekom's revenue fell 3% in the first quarter, to
HUF151.89 billion, from a year earlier and was below the HUF153.1
billion expected by analysts. The decline was due to lower fixed-
and mobile-voice revenues coupled with lower revenues from SI/IT
and energy services, the latter driven by a combination of
unseasonably mild winter weather and an 11% cut in regulated retail
prices by the Hungarian government in November 2013.
For 2014, Magyar Telekom continues to forecast a revenue drop of
up to 3%, from HUF637.5 billion in 2013, on lower growth in retail
energy and equipment sales. The company expects its 2014 Ebitda to
decline by 3% to 6% from 2013.
Magyar Telekom shares closed Wednesday HUF1, or 0.3%, higher, at
HUF328. Deutsche Telekom AG (DTE.XE) holds a 59.3% stake in the
company.
Write to Margit Feher at margit.feher@wsj.com
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