Investor News

Budapest, August 7, 2024 17:30

Magyar Telekom (Reuters: MTEL.BU and Bloomberg: MTELEKOM HB, hereinafter: Company), the leading Hungarian telecommunications service provider, today reported its consolidated financial results for the second quarter and first half of 2024, in accordance with IFRS Accounting Standards as adopted by the EU (hereinafter: half-year report). The half-year report contains unaudited figures.

Financial highlights:

 

• Group revenue increased by 15.6% year-on-year in Q2 2024, driven by growth in service revenue that was strongly supported by the inflation-based fee adjustment at the Hungarian operation, whilst higher equipment sales and SI/IT revenue also contributed to the quarterly increase.
• Gross profit improved in line with revenue trends, growing 20.9% year-on-year in Q2 2024.
• EBITDA AL increased by 30.9% year-on-year in Q2 2024, thanks to the improvement in gross profit performance that could more than compensate for the increase in employee related expenses.
• Net income in Q2 2024 amounted to HUF 43.4 billion, against HUF 22.3 billion in Q2 2023, reflecting EBITDA growth partly mitigated by higher income tax expense.
• Capex after lease excluding spectrum licenses amounted to HUF 46.3 billion in H1 2024, representing a 6.6% reduction year-on-year, driven by different within-year dynamic of the annual CPE procurements in Hungary coupled with lower network investments and seasonally lower TV content capitalization costs in North Macedonia.
• Free cash flow, excluding spectrum license fees, amounted to HUF 36.7 billion in H1 2024, representing an improvement of HUF 29.4 billion year-on-year attributable to growth in profitability partially mitigated by higher working capital needs related to the expanding revenue base and different vendor outpayment dynamics.
• Net debt reached HUF 449.1 billion by the end of June 2024, reflecting dividend payment of HUF 41.5 billion and share buyback of HUF 22.3 billion in Q2 2024.

Tibor Rékasi, Magyar Telekom CEO commented:

 

“I am delighted to report a strong set of results for the second quarter of 2024. Central to Magyar Telekom’s success is our customer-centric approach and our ability to provide a gigabit experience on our fixed and mobile networks. By the halfway point of 2024, we had reached 3.8 million households and businesses with gigabit-capable fixed technology. We increased our outdoor population-based 5G coverage to reach 70%, and we made further progress in the radio network modernization of our mobile network, reaching 87% readiness.

Operationally, our network provides an excellent foundation to ensure outstanding customer experience and fulfill our customers’ data needs. Financially, I am pleased to report that in the second quarter revenue increased by 15.6% year-on-year, while EBITDA AL grew by 30.9% due to strong revenue generation and the success of our cost mitigation initiatives.

Looking ahead, this strong performance and more favorable commercial outlook means that we are now targeting revenue growth of approximately 10% and EBITDA AL growth of approximately 25% for full year 2024. Consequently, we are also upgrading our guidance for adjusted net income to approximately HUF 150 billion, with a projected free cashflow generation of approximately HUF 140 billion.”

 

 

This investor news contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should not have undue reliance placed upon them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

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 financial statements for the year ended December 31, 2023, available on our website at http://www.telekom.hu which have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) and adopted by the European Union.

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