May 8 (Bloomberg) -- Magyar Telekom Nyrt., the Hungarian unit of Deutsche Telekom AG, dropped to the lowest level on record after first-quarter profit missed analyst estimates.
The shares, which have traded without the right for a 50-forint dividend since yesterday, fell 5 percent to 343 forint by the close in Budapest. Volume was 176 percent of the stock’s three-month average. The benchmark BUX stock index dropped 0.2 percent to 18,458.42, having risen 3.4 percent in the second quarter.
Net income for the first three months stood at 1.7 billion forint ($7.6 million), Magyar Telekom said in a statement to the Budapest Stock Exchange today. That compared with a median estimate of 5.75 billion forint in a Bloomberg survey of four analysts. A tax on utility infrastructure introduced last year hit earnings, while a government-imposed price cut in January wiped out margins in Magyar Telekom’s energy unit, the company said.
“Profit all but disappeared,” putting pressure on the shares, Zsolt Balasy, a Budapest-based equities analyst at MKB Bank, a unit of Bayerische Landesbank, wrote in a research report today. “It is especially concerning that energy retail, the unit expanding fastest at the moment, has become unprofitable because of the price cuts.”
While Magyar Telekom’s “positive” business performance supports dividend plans, Hungary’s macroeconomic prospects are less certain, Deputy Chief Executive Officer Janos Szabo told reporters today, declining to provide a dividend target for the coming year.
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