Magyar Telekom Maintains Dividend Payment Plan as It Performs in Line

By Margit Feher

BUDAPEST--Hungary's largest telecommunications company, Magyar Telekom Nyrt. (MTELEKOM.BU), maintained its dividend payment plan after the second quarter as its performance is meeting management expectations, the company said Thursday.

"Our performance so far this year has been in line with our expectations and I am pleased to reiterate our guidance targets," Chief Executive Christopher Mattheisen said in a statement.

Net profit totaled 11.37 billion ($40.8 million) in the April-June period, down 9.2% from a year earlier but higher than analysts' consensus forecast of HUF10.8 billion, according to a poll conducted by the company.

Deutsche Telekom AG (DTE.XE) has a 59.3% stake in Magyar Telekom.

Revenue fell 6.5% to HUF148.17 billion, mainly because of the divestment of most of its energy business, and lower revenue from systems integration and information technology services. The latter resulted from a temporary slowdown in support funds from the European Union.

Core telecommunications revenue rose 2.2%, boosted by rising mobile data and equipment sales, and higher fixed broadband and television services revenue, the company said. Operations in Hungary continued to drive performance, it added. Magyar also has units in Macedonia and Montenegro.

Earnings before interest, taxes, depreciation and amortization, a key indicator of profitability in the telecommunications sector, fell 2.0% to HUF51.15 billion, as higher other operating expenses, including marketing and sponsorship costs for recent and upcoming international sports events, offset gross profit growth and lower employee-related expenses.

Second-quarter Ebitda beat analysts' forecast of HUF50.5 billion. The Ebitda margin, which analysts also watch closely, was 34.5%, up sharply from 32.9% a year earlier and exceeding analysts' forecast of 34.3%.

The company maintained that it aims to raise Ebitda this year to HUF187 billion-HUF191 billion from HUF187.3 billion last year, and achieve revenue this year of between HUF580 billion and HUF590 billion, down from HUF656.3 billion in 2015.

It confirmed that it plans to raise its 2016 dividend payout to HUF25 a share, up from HUF15 last year.

Write to Margit Feher at [e-mail]; Twitter: @margitfeher

(END) Dow Jones Newswires

August 04, 2016 13:06 ET (17:06 GMT)

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