Good First Quarter Results at Magyar Telekom

Hungary's largest telecommunication operator, Magyar Telekom maintained strong momentum across its business lines, as the Group revenue grew by 8.4% year-on-year in the first quarter of 2022, the company announced on the website of the Budapest Stock Exchange this Wednesday.

According to the statement, the revenue growth is owed to continued expansion of the customer base as strong demand for mobile data, high bandwidth broadband packages and mobile equipment continued.

The report points out that

– Gross profit improved in line with revenue expansion, growing by 8.3% year-on-year in Q1 2022

– EBITDA AL rose sharply due to favorable business trends and a HUF 3.3 billion one-off gain recognized on the sale of an IT subsidiary, Pan-Inform LLC

– Capex AL excluding spectrum licenses rose to HUF 23.0 billion in Q1 2022, driven primarily by major investments at the North Macedonian operation relating to the RAN modernization program and TV content capitalization

– Free cash outflow amounted to HUF 0.5 billion in Q1 2022, improving by HUF 16.5 billion year-on-year, driven by the positive underlying results, lower interest payments and the one-off cash inflow from the IT subsidiary sale. Payment for the recently acquired 900 MHz and 1800 MHz frequency bands in the amount of HUF 44.3 billion was made at the beginning of April 2022, rather than in Q1 2022 as originally planned, and so had no impact on free cashflow in the quarter

Operational highlights

– Customer base expansion in Hungary continued into Q1 2022: fixed broadband subscriptions rose by 7.3%, TV customers increased by 6.0% while the mobile SIM base rose by 5.0% year-on-year;

– Hungarian fiber network penetration continued to rise, reaching almost 30% by end-March 2022;

– Accelerated growth in mobile data usage was sustained with an 30% year-on-year increase; average monthly usage reached 8.7 GB in Q1 2022;

– Strong focus on investment in fixed and mobile networks, vital to maintaining superior customer experience, continued in both countries of operation with accelerated fiber roll-out and RAN modernization.

Tibor Rékasi, Magyar Telekom CEO is quoted in the statement as saying that “despite the fast-changing macroeconomic environment since the start of the year, Magyar Telekom maintained strong momentum across its business lines, delivering 8.4% revenue growth for the quarter. This positive trend was driven by successful expansion of our fixed and mobile customer bases, as well as the accelerated mobile data usage and strong demand for the gigabit capable network experience. We excelled at the latter thanks to our accelerated fiber rollout and RAN modernization in Hungary and North Macedonia, which form a key part of our customer-centric strategy.

During the quarter we deployed smart control and conservative approach on our operating expenses grew our gross profit and successfully closed the sale of Pan-Inform LLC, all of which allowed us to significantly increase our EBITDA AL year-on-year in Q1 2022.

Looking ahead, we remain strongly committed to continued delivery against our strategic objectives. Taking into account the increased level of uncertainty in our external environment, we maintain our targets for 2022 at present.”