Magyar Telekom Gains Most This Month on Tax Drop: Budapest Mover
Magyar Telekom Nyrt., the Hungarian unit of Deutsche Telekom AG (DTE), rose the most this month after saying it will pay less for a tax than earlier estimated.
Magyar Telekom is paying 7.2 billion forint ($31 million) for a utility tax this year, it said in a statement to the Budapest Stock Exchange today. In November, the company said it expected to pay 9 to 11 billion forint per year on the levy. The lower-than-estimated cost means Magyar Telekom’s dividend, which management proposed at 50 forint for the 2012 business year, may not fall as much in future years as investors expected, said Gergely Gabler, a Budapest-based analyst at broker Equilor Befektetesi Zrt.
“The market doesn’t regard the 50 forint level as sustainable but with the lower utility tax payment a 40 forint dividend may now be more doable,” Gabler said in a phone interview.
Magyar Telekom can pay a dividend as long as the company’s net debt ratio is between 30 percent and 40 percent, financial news website investor.hu reported today, citing Chief Executive Officer Christopher Mattheisen. Magyar Telekom’s net debt ratio was 34 percent last year, allowing the company to pay 50 forint in dividends, Mattheisen said, without commenting further on future payments.
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