Good Year for Magyar Telekom

Total revenue at the Hungarian telecommunications service provider Magyar Telekom increased by 2.5% year-on-year to HUF 193.6 billion in Q4 2021, or 4.0% year-on-year to HUF 700.1 billion for the full year, primarily driven by increases in telecommunication service revenue, particularly mobile data which offset the lower System Integration and IT (SI/IT) sales in both countries of operation.

According to a statement by the company, mobile revenue increased by 9.3% year-on-year to HUF 107.1 billion in Q4 2021 , driven by further growth in mobile data and SMS revenue, coupled with an increase in equipment sales in Hungary.
Fixed line revenue increased by 1.1% year-on-year, to HUF 58.6 billion in Q4 2021 as improvements in broadband and TV revenue offset the decline in voice revenue and lower equipment sales.
System Integration and IT revenue was lower by 15.4% year-on-year to HUF 27.9 billion in Q4 2021 and declined moderately by 2.9% to HUF 86.9 billion for the full year 2021. Quarterly performance reflects different seasonal patterns in Hungarian project revenue with year-on-year lower revenues in the fourth quarter, coupled with the absence of major customized solution projects in North Macedonia.
Direct costs increased by 6.1% year-on-year to HUF 96.4 billion in Q4 2021, and by 4.8% year-on-year to HUF 311.7 billion for the full year, largely driven by higher bad debt and equipment expenses.

For the full year, EBITDA rose by 6.6%, and EBITDA AL by 6.7% year-on-year. These improvements were primarily driven by the increase in service revenue coupled with savings in employee related expenses.

Profit for the period increased by 18.0% year-on-year to HUF 18.8 billion in Q4 2021 and was up by 35.7% at HUF 62.8 billion for the full year. The increase was attributable to strong operational performance, improved cost efficiency and more favorable financial results.

As Magyar Telekom CEO Tibor Rékasi commented, “our performance in 2021 demonstrates the success with which we addressed the external challenges arising from the Covid-19 pandemic. Thanks to our efforts to respond promptly to rapidly changing consumer needs, we continued to provide enhanced quality of service and additional support to our customers throughout the year. Considerable ongoing investment in our networks has enabled Magyar Telekom to provide sought-after seamless connectivity. As a result, an increasing number of clients chose Magyar Telekom as their preferred telecommunication provider, allowing us to deliver year-on-year revenue and EBITDA AL growth of 4.0% and 6.7%, respectively, ahead of our targets for the year. Our strong investment in the business is reflected in moderately higher Capex versus our initial targets. This, coupled with temporary unfavorable working capital developments, resulted in a lower than expected free cash flow of HUF 56.2 billion."