BUDAPEST May 8 Magyar Telekom said on
Thursday its first-quarter net profit more than doubled from a
year ago, exceeding analyst expectations and driven by improved
gross margins across its key businesses that helped offset a
decline in revenues.
Net profit for the first three months came in at 4.83
billion forints ($22.04 million), up from 1.69 billion forints
in the same period a year earlier and above analyst forecasts
for 3 billion forints in a recent poll by financial news website
Cuts in operating costs and lower financial expenses also
boosted bottom-line performance as the Deutsche Telekom
unit booked significantly lower foreign currency
losses in the first quarter than a year ago, it said.
Earnings before interest, taxes, depreciation and
amortisation (EBITDA) rose by 3.8 percent to 40.53 billion
forints, also above market expectations, even as quarterly
revenues fell 3 percent, missing analyst forecasts.
"The decline is the result of lower fixed and mobile voice
revenues coupled with lower revenues from systems
integration/information technology and energy services," the
"The latter was driven by a combination of the 11 percent
cut in regulated retail prices as of November 2013 and the very
mild winter season."
For 2014, the company, which has a market capitalisation of
$1.54 billion, flagged a decline in revenue by up to 3 percent
and said EBITDA could fall by 3-6 percent.
Magyar Telekom added that it experienced some headwinds in
its foreign markets in Macedonia and Montenegro. Fierce
competition and regulatory issues would pressure margins in
those countries, it said.
The company's shares have gained 7.5 percent over the past
three months according to Thomson Reuters data, outperforming
the blue chip index, which dropped 0.7 percent over the
Two of 13 analysts tracked by Thomson Reuters rate the stock
a 'buy', five rate it a 'hold', while six have assigned various
levels of 'sell' recommendations.
($1 = 219.1 Hungarian forints)
(Reporting by Gergely Szakacs; Editing by Matt Driskill)