Aug. 9 (Bloomberg) -- Magyar Telekom Nyrt., the Hungarian phone unit of Deutsche Telekom AG, plummeted to an all-time low after the company reported a 9 percent decline in second-quarter earnings before interest, taxes, depreciation and amortization.
Shares dropped 2.2 percent to 401 forint, the lowest ever, by 11:25 a.m. in Budapest, pushing this year’s fall to 22.5 percent. That compares with a 5.4 percent gain in the benchmark BUX stock index in the same period.
Magyar Telekom’s Ebitda, adjusted for a special tax, spendings related to an internal investigation and headcount reduction, fell 9 percent to 56.2 billion forint in the April-June period, the company said in a statement to the Budapest bourse today. Revenue rose 1.3 percent to 145.5 billion forint in the period.
The Budapest-based company, which has subsidiaries in Macedonia and Montenegro, saw its profit suffer as the economic recession in the region put pressure on households’ disposable income and a special industry tax in Hungary hit the bottom line. Expectations for a slow recovery in the domestic market “dissipated” as a result of an “increasingly negative” Hungarian economy and regulations, Magyar Telekom said in the release.
Second-quarter results were “mixed” with Ebitda and net profit missing market expectations, analysts at Budapest-based brokerage Equilor Zrt. said in an e-mailed note today. “Broad market interpretation is likely to be a ‘fail’, in our view.”
Net income was 10.7 billion forint ($48 million), compared with 4.4 billion forint a year earlier, after a $62 million one-time expense depleted the year-earlier profit. The average estimate of eight analysts surveyed by Bloomberg was 11.9 billion forint.
“Despite the worsening Ebitda trends, outlook for our revenues looks more positive,” Chief Executive Officer Christopher Mattheisen said in the release. Revenue in the first six months increased an annual 2 percent, “comfortably exceeding our guidance of flat to a maximum decline of 2 percent for the full year,” the executive said.
The company will raise domestic telephony tariffs in several steps this year after the government introduced a special tax on telecommunications services, Magyar Telekom said on July 12.
The management reiterated an earlier forecast for an Ebitda decline of between 4 to 6 percent this year, excluding the effects of the special industry tax.
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