Magyar Telekom Reports Increased Revenues

Group revenue increased by 14.0% year-on-year in Q2 2023, owing to continued strong demand for mobile data and fixed broadband services coupled with the positive effects of inflation-based fee adjustments implemented in Hungary.

The mobile service provider reported on the website of the Budapest Stock Exchange that gross profit improved in line with revenue trends, growing 18.7% year-on-year in Q2 2023.

Indirect costs grew by 3.6% year-on-year in Q2 2023, owing to the different timing of the supplementary telecommunication tax which offset other increases. Meanwhile, indirect costs increased 22.0% year-on-year in H1 2023, driven by a four-fold increase in electricity costs, an average 7% rise in Hungarian wage expenses, and inflationary pressure impacting other cost items.

Consequently, EBITDA AL increased by 33.5% year-on-year in Q2 2023, and by 11.4% year-on-year in the first half of 2023, with the improvement in gross profit offsetting the rise in indirect costs.

Net income in Q2 2023 amounted to HUF 22.3 billion, and reached HUF 32.8 billion in H1 2023, reflecting EBITDA growth which was partly offset by a deteriorating net financial result.

Adjusted net income was HUF 25.7 billion in Q2 2023 and amounted to HUF 37.8 billion in H1 2023, representing a HUF 12.1 billion increase year-on-year, in line with improvements in underlying profitability.

Free cash flow, excluding spectrum license fees, amounted to HUF 7.3 billion in H1 2023, down by HUF 25.1 billion year-on-year. This decrease is the result of a variance in timing of the supplementary telecommunication tax payment. In 2022, this tax was payable in November, whereas in 2023 a payment (including 2022 tax settlement and 2023 advance payment) of HUF 26.4 billion was due in May.

Tibor Rékasi, Magyar Telekom CEO, commented as saying that “throughout the second quarter of 2023, we continued to navigate an uncertain economic environment while remaining focused on our primary goal of being the ‘number one choice for customers’ by offering seamless connectivity and an outstanding user experience.

Our dedication has paid off, and by the end of the second quarter, we successfully reached 1.3 million customers with gigabit connections. Additionally, we met more than 25% higher average mobile data usage compared to the base period. To maintain the highest standard of service and meet our customers’ growing data needs, we continued to progress our multi-year mobile network modernization program and as a next step, we expanded the reach of our 5G service and have already achieved 60% coverage.”