Magyar Telekom Jumps as Hungary Scraps Web Tax: Budapest MoverMarton Eder
Magyar Telekom Nyrt. rose the most in eight months as Hungarian Prime Minister Viktor Orban decision to scrap plans to introduce an Internet tax following protests boosted speculation the company will pay a dividend.
Hungary’s largest telecommunications company gained 5.3 percent to 340 forint by the close in Budapest, rebounding from the lowest since May. About 4.2 million shares were traded, almost three times the three-month daily average. The stock led the benchmark BUX index 1 percent higher.
The Internet tax plan sparked two of the biggest rallies against Orban’s administration since the premier returned to power in 2010. The demonstrations made the introduction of the tax “impossible,” Orban said on state radio today. Magyar Telekom said earlier this month it doesn’t expect to pay a dividend from 2014 profit.
“There may be renewed expectations the company will pay a dividend in 2016,” Budapest-based analysts at Equilor Befektetesi Zrt. brokerage, led by Akos Kuti, said in an e-mailed note. The company may pay a 20 to 30 forint-per-share dividend in 2016 after the government decided to scrap the tax, which would have imposed a 12 billion-forint ($49 million) levy on the company each year, according to Equilor estimates.
Magyar Telekom abandoned payout plans to keep its net-debt ratio in the 30 to 40 percent range after purchasing three mobile frequency blocks in Hungary for 58.7 billion forint in September, it said Oct. 7.
The company, which had 36 percent of all broadband Internet subscriptions in Hungary in August, said in July it would cut as many as 1,700 jobs in the country through the end of next year. It competes with the local unit of Liberty Global Plc and Digi Kft. for broadband customers and subsidiaries of Telenor ASA and Vodafone Group Plc for mobile phone customers.