Makedonski Telekom Skopje : Operating results of Makedonski Telekom for the first quarter of 2018

• Net profit increased by 16% and amounted to MKD 382 million
• Number of broadband internet accesses at the end of the first quarter of 2018 remained stable and amounted to 187.7 thousand
• 7.5% growth in the IPTV segment and 119.1 thousand customers (internal estimate)

Makedonski Telekom AD - Skopje has a leading position on the fixed voice services market in the first quarter of 2018, show the unaudited financial statements as per the International Financial Reporting Standards (IFRS).

The net profit for the first quarter of 2018 increased by 16% compared to the same period of the previous year, and amounted to MKD 382 million.

The sales revenues in the first quarter of 2018 amounted to MKD 2.503 million, which is an increase of 2.1% (without the IFRS 15 effect) compared to the same period of the previous year.

The total number of broadband internet accesses at the end of the first quarter of 2018 remained stable and amounted to 187.7 thousand, whereas the broadband internet market share at the end of the first quarter of 2018 amounted to 45.1% (internal estimate).

On the TV market, Makedonski Telekom has a share of 28.6% of the total TV market (internal estimate). As a result of the high quality, the interactivity and the unique TV experience, the IPTV (digital television via Internet protocol), is well accepted on the market. Therefore, the company achieved an increase in the number of IPTV customers (including Magenta 1, 3 Play and other TV services) by 7.5% compared to the same period of the previous year, which resulted in a customer base of 119.1 thousand at the end of the first quarter of 2018.

The company has a share of 48.6% on the mobile telephony market (internal estimate). The subscriber base at the end of the first quarter of 2018 had 1,174 thousand subscribers which is a decrease of 4.8% compared to the same period of the previous year.

The mobile voice services revenues at the end of the first quarter of 2018 increased by 1.9% (without IFRS 15 effect) compared to the same period of the previous year. The increase is mainly a result of the higher retail revenues, driven by the increased traffic and compensated by the lower volume of international incoming termination traffic.

International Financial Reporting Standard 15 Revenue from Contracts with Customers

In the preparation of the reports on the operation of the company in the first quarter of the year, the application of the new ISFR 15 Revenue from Contracts with Customers has been taken into consideration. The adoption of the standard will result in significant changes in the financial statements of Makedonski Telekom, primarily in terms of the time of the recognition of the revenue and in terms of the capitalization of the costs related to the conclusion of contracts with customers. The application of the new ISFR 15 Revenue from Contracts with Customers is required in terms of the annual reporting period beginning on or after 1 January 2018.