MTel Earnings Fall on Higher Costs
First-quarter net income of Magyar Telekom (MTel) fell 43% year-on-year to HUF 10.5 billion as indirect costs climbed faster than revenue, state news wire MTI reports, citing an earnings report released after the closing bell on Wednesday.
Revenue rose 13% to HUF 195.9 bln. The direct cost of sales climbed at a slower pace, increasing 12% to HUF 81.8 bln, but indirect costs jumped 45% to HUF 56.1 bln, lifted by the supplementary telecommunications tax, higher electricity costs, a 7% increase in payroll costs in Hungary and inflationary pressure on other costs.
CEO Tibor Rékasi noted that electricity costs had quadrupled from the same period a year earlier and said EBITDA after leases had fallen 9%.
"Given the increasing subcontractor costs, unfavorable yield environment, and weaker forint, we continue to take proactive steps to address changes in our external environment and leverage our strong position in the market to drive positive momentum in our operating performance," he added.
MTel affirmed guidance for 2023, putting revenue growth at 5-10% and projecting "moderate growth" for adjusted net income. In an outlook for 2024, it projected "mid-single digit" revenue growth and "dynamic growth" for adjusted net income.
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