Investor Releases
Update on Magyar Telekom’s headcount reduction program - costs to be lower than anticipated
Budapest, December 20, 2007
Magyar Telekom (Reuters: NYSE: MTA.N, BÉT: MTEL.BU and Bloomberg: NYSE: MTA US, BÉT: MTELEKOM HB), the leading Hungarian telecommunications service provider, announces further details on the headcount reduction agreed with the trade unions in October.
In line with the announcement made on 1st October, Magyar Telekom aims to decrease the underlying Group-level employee related expenses by 5% next year. The related severance payments accounted in the fourth quarter 2007 will, however, be lower than the HUF 24bn originally estimated. After finalizing the details with the trade unions, defining the final structure of the headcount reduction and identifying the employees to be laid off, the financial cost of the program decreased. In addition, the headcount reduction program at the international subsidiaries has been postponed. As a result, severance expenses accounted in the fourth quarter are now expected to be around HUF 19 bn. The cash flow impact for 2007 will be around HUF 3 bn.
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Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors are described in, among other things, our Annual Report on Form 20-F for the year ended December 31, 2006 filed with the U.S. Securities and Exchange Commission.