* Quarterly net profit still below market expectations
* Sees lower 2014 revenues, further decline in core profit
* Dividend outlook in focus after company scraps 2013 payment
BUDAPEST, Feb 27 (Reuters) - Magyar Telekom said on Thursday it swung into a small fourth-quarter profit from a loss a year earlier, as revenues inched higher and operating costs declined.
But for 2014 the company, majority-owned by Deutsche Telekom , flagged a decline in revenue by up to 3 percent and said earnings before interest, taxes, depreciation and amortisation (EBITDA) could also fall by up to 3-6 percent.
Chief Executive Christopher Mattheisen told Reuters in September the company expected to stabilise or slightly grow EBITDA in the next two years barring any shocks.
Fourth-quarter net profit came in at 253 million forints ($1.12 million) versus a loss of 1.6 billion a year earlier, below analysts' forecasts for 660 million according to a poll by financial news website portfolio.hu.
Fourth-quarter revenues rose by 0.5 percent to 165.7 billion forints driven by higher energy and mobile data revenues. However, traditional fixed-line and mobile voice revenues fell in Hungary as well as the Macedonian market.
EBITDA rose by 4.7 percent to 38.8 billion forints due to lower costs in marketing, consultancy and rental fees, the company said, adding that lower severance payments and a decline in its quarterly tax bill also improved its profitability.
But for the full year, EBITDA fell by nearly 8 percent, extending a slump since 2009 as the company struggles with a weak economy and higher taxes imposed to keep Hungary's budget deficit under control. In all, it paid 31.4 billion forints in various special taxes last year, slightly down from 2012 levels.
Full-year revenues rose by 5 percent due to higher income from the systems integration and information technology segments as well as higher retail gas and electricity revenues, services the company entered into to improve customer retention.
"Looking ahead to 2014, we expect lower growth in retail energy and equipment sales to lead a decline in our revenues of up to 3 percent compared to 2013," CEO Mattheisen said in the company's quarterly flash report.
"Our reported EBITDA is expected to decline by 3-6 percent driven by the continued, albeit more gradual, shift in our revenue mix to lower margin services," he said.
The company said in December it would probably not pay a dividend on its 2013 results as it aimed to keep its gearing in a 30-40 percent range targeted in its dividend policy. Its gearing stood at 43.8 percent at the end of last year.
Magyar Telekom shares gained 16.7 percent over the past three months, based on Thomson Reuters data, moving away from record lows hit in November and outperforming the benchmark index, which fell 3 percent over that period.
Just two out of 13 analysts tracked by Thomson Reuters rate the stock a "buy". The rest have assigned "hold" or various levels of "sell" recommendations.
The company had a market capitalisation of $1.5 billion based on its Wednesday close. ($1 = 226.78 Hungarian forints) (Reporting by Gergely Szakacs; Editing by Stephen Coates)