BUDAPEST: Magyar Telekom reported on Thursday a growth of 14.6 percent in third-quarter net profit, broadly in line with market expectations, as lower amortisation and financial costs offset a rise in severance payments.
Net profit came in at 10.7 billion forints ($43.17 million), up from 9.3 billion in the same period a year earlier and largely in line with forecasts for 10.5 billion in a poll by financial news website portfolio.hu.
Revenue dropped by half a percent to 157.5 billion forints, slightly better than market expectations, as higher revenue from mobile internet and TV businesses largely offset a decline in sales of voice and systems integration/information technology.
The biggest telecom firm in Hungary said the merger of two competitors in its Macedonian market, if approved, would “reshape the competitive environment” there. In Montenegro, performance was hit by the weak tourist season and regulatory pressure.
The Deutsche Telekom unit kept its public guidance for a maximum 3 percent annual decline in earnings before interest, taxes, depreciation and amortisation.
The company’s quarterly severance bill rose to 3.7 billion forints from 1.5 billion a year earlier as it implements a batch of job cuts to improve efficiency.
The company has said it would pay no dividend on its 2014 results due to its gearing level and the current operating environment. Its gearing rose further, to 44.6 percent in the third quarter, above its 30-40 percent target range.
Magyar Telekom shares have fallen 7.2 percent over the past three months, underperforming the Budapest blue chip index, which dropped 2.15 percent over the same period.
Half of the 10 analysts tracked by Thomson Reuters rate the stock as “hold,” one rates it as “strong buy,” while four have assigned a “sell” recommendation on the shares.
