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Magyar Telekom Profit Increase Beats Estimates as Costs Decline

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Aug. 8 (Bloomberg) -- Magyar Telekom Nyrt., the Hungarian phone unit of Deutsche Telekom AG, said second-quarter profit rose 14 percent as financial costs declined.

Net income climbed to 12.2 billion forint ($55 million) from 10.7 billion forint a year earlier, the company said in a regulatory statement today. That beat the mean estimate of 11.2 billion forint in a Bloomberg survey of ten analysts. Financial expenses dropped to 6.5 billion forint from 7.3 billion forint on lower foreign-currency losses and falling interest rates.

Earnings before interest, taxes, depreciation and amortization rose 0.3 percent to 49.6 billion forint from a year earlier. The Budapest-based company kept its Ebitda forecast for a decline of 9 percent to 12 percent this year on higher taxes in Hungary and shrinking revenue in Macedonia.

Magyar Telekom sees revenue rising in 2013, compared with a June forecast for sales staying unchanged, the operator said without specifying the rate of sales increase. Second-quarter revenue rose 7.9 percent to 157 billion forint on higher energy and equipment sales.

“Our main focus is to ensure Ebitda figures turn out as good as possible and meet our forecast,” Deputy Chief Executive Officer Janos Szabo said at a news conference in Budapest today. Energy sales will be key to group-level revenue and the company is determined to remain an energy service provider even after government-mandated household energy price cuts, Szabo said.

Magyar Telekom shares rose 1.2 percent to 326 forint at 9:25 a.m. in Budapest, the highest level since July 19. The benchmark BUX index gained 0.6 percent, rising for a second day.

Magyar Telekom maintained its plan for capital expenditure to decline about 5 percent in 2013 from a year earlier.

To contact the reporter on this story: Edith Balazs in Budapest at ebalazs1@bloomberg.net

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