* Q2 net profit 11.6 bln forints, above expectations
* Expects maximum 3 pct y/y fall in EBITDA vs pvs 3-6 pct
* Quarterly revenues down 3.3 pct, broadly in line with
(Adds detail on quarterly results, share price)
BUDAPEST, Aug 7 Magyar Telekom
improved its guidance on Thursday for 2014 earnings before
interest, taxes, depreciation and amortisation to a decline of
no more than 3 percent from last year versus a 3-6 percent fall
"The raising of EBITDA guidance is predominantly driven by
our efforts to improve gross margin, along with the slight
improvement that we are witnessing in the household spending
power in Hungary," Chief Executive Christopher Mattheisen said
in the company's earnings note.
Last year EBITDA came in at 179.5 billion forints ($761.21
million). The company left its revenue and capital expenditure
For the second quarter, the Deutsche Telekom unit
reported net profit of 11.6 billion forints, a 5.1 percent
decline year-on-year, that beat market expectations.
Analysts surveyed by financial news website portfolio.hu had
expected net profit to fall by 12.2 percent from last year to
10.7 billion forints.
Quarterly revenues dropped by 3.3 percent to 151.8 billion
forints, broadly in line with market expectations.
The decline was driven by lower income from the fixed-line
and mobile voice segments as well as in energy re-sale after the
government imposed cuts in household gas and electricity prices,
the company said.
It said lower equipment sales also dented top-line growth.
"The persistent competitive challenges in Macedonia and the
macroeconomic and regulatory headwinds in Montenegro also
negatively impacted the revenue performance," Mattheisen added.
But second-quarter EBITDA was broadly unchanged, down 0.3
percent at 49.6 billion forints, as the company could largely
offset a rising sectoral tax bill by higher gross margins in the
energy and systems integration/information technology segments.
Magyar Telekom, which has a market capitalisation of $1.6
billion, said last month it would lay off up to 1,700 workers by
2016 at a cost of about 12 billion forints to improve its
The company's shares have gained 10.4 percent over the past
three months according to Thomson Reuters data, outperforming
the Budapest blue chip index, which fell 1.8 percent over
(1 US dollar = 235.8100 Hungarian forint)
(Reporting by Gergely Szakacs; Editing by Stephen Coates)