MAGYAR TELEKOM TÁVKÖZLÉSI NYILVÁNOSAN MÜKÖDÖ RÉSZVÉNYTÁRSASÁG Rékasi Tibor
Dodonova Daria Aleksandrovna
MAGYAR TELEKOM
HALF-YEAR REPORT
ANALYSIS OF THE FINANCIAL STATEMENTS FOR THE
SECOND QUARTER ENDED JUNE 30, 2023
Budapest - August 9, 2023 - Magyar Telekom (Reuters: MTEL.BU and Bloomberg: MTELEKOM HB, hereinafter: Company), the leading Hungarian telecommunications service provider, today reported its consolidated financial results for the second quarter and first half of 2023, in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU (hereinafter: half-year report). The half-year report contains unaudited figures for each reporting period.
TABLE OF CONTENTS | |||
2.1.2 | Group Cash Flows | 7 | |
2.1.3 Consolidated Statements of Financial Position | 9 | ||
2.1.4 | Related party transactions | 9 | |
2.1.5 | Contingencies and commitments | 10 | |
2.1.6 | Significant events | 10 | |
2.2. | Segment reports | 10 | |
2.2.1 | MT-Hungary | 11 | |
2.2.2 | North Macedonia | 12 | |
3. | APPENDIX | 14 | |
3.1. | Basis of preparation | 14 |
3.2. Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income - quarterly year-on-year
comparison | 15 | |
3.3. | Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income - year-to-date comparison | 16 |
3.4. | Revenue breakdown - quarterly year-on-year comparison | 17 |
3.5. | Revenue breakdown - year-to-date comparison | 17 |
3.6. | Operating expenses breakdown - quarterly year-on-year comparison | 18 |
3.7. | Operating expenses breakdown - year-to-date comparison | 18 |
3.8. | Interim Consolidated Statement of Financial Position - Assets | 19 |
3.9. | Interim Consolidated Statement of Financial Position - Liabilities and Equity | 20 |
3.10. | Interim Consolidated Statement of Cash Flows | 21 |
3.11. | Net debt reconciliation to changes in Statement of Cash Flows | 22 |
3.12. | Interim Consolidated Statement of Changes in Equity | 23 |
3.13. | Exchange rate information | 24 |
3.14. | Segment information | 24 |
3.15. | Fair value of financial instruments - financial assets | 25 |
3.16. | Fair value of financial instruments - financial liabilities | 25 |
3.17. | EBITDA reconciliation | 26 |
3.18. | Adjusted profit attributable to owners of the parent reconciliation | 26 |
3.19. | Capex from Interim Consolidated Statement of Cash Flows | 26 |
3.20. | Capex from Interim Consolidated Statement of Financial Position | 27 |
4. DECLARATION | 28 |
2
Company name: | Magyar Telekom Plc. | Company address: | H-1097 Budapest Könyves Kálmán krt. 36. |
E-mail address: | investor.relations@telekom.hu | ||
IR contacts: | Position: | Telephone: | E-mail address: |
Diána Párkányi-Várkonyi | Capital Market Relations Hub Lead | +36-1-481-7676 | varkonyi.diana.annamaria@telekom.hu |
Rita Walfisch | Investor Relations manager | +36-1-457-6084 | walfisch.rita@telekom.hu |
Gabriella Pászti | Investor Relations manager | +36-1-458-0332 | paszti.gabriella@telekom.hu |
1. HIGHLIGHTS
Q2 2022 | Q2 2023 | Change | 1-6 months 2022 | 1-6 months 2023 | Change |
(HUF millions, except ratios) | (%) | (%) |
Revenue | 182,496 | 208,090 | 14.0% |
Operating profit | 22,686 | 41,025 | 80.8% |
Profit attributable to: | |||
Owners of the parent | 10,570 | 22,258 | 110.6% |
Non-controlling interests | 1,158 | 1,417 | 22.4% |
11,728 | 23,675 | 101.9% | |
Adjusted profit attributable to owners of the parent | 10,112 | 25,658 | 153.7% |
Gross profit | 105,491 | 125,232 | 18.7% |
EBITDA | 57,905 | 75,921 | 31.1% |
EBITDA AL | 51,395 | 68,603 | 33.5% |
Free cash flow | |||
Free cash flow excl. spectrum licenses | |||
Capex after lease | 29,559 | 26,035 | (11.9%) |
Capex after lease excl. spectrum licenses | 29,559 | 25,449 | (13.9%) |
Number of employees (closing full equivalent) |
356,551 | 403,960 | 13.3% |
49,463 | 65,472 | 32.4% |
29,023 | 32,777 | 12.9% |
2,047 | 2,673 | 30.6% |
31,070 | 35,450 | 14.1% |
25,724 | 37,789 | 46.9% |
206,389 | 239,319 | 16.0% |
120,051 | 133,950 | 11.6% |
107,210 | 119,424 | 11.4% |
(11,851) | 6,971 | n.m. |
32,429 | 7,284 | (77.5%) |
52,560 | 49,557 | (5.7%) |
52,560 | 48,971 | (6.8%) |
6,730 | 6,644 | (1.3%) |
Dec 31, 2022 | June 30, 2023 | Change |
(%) |
Net debt Net debt / EBITDA
476,918 | 513,247 | 7.6% |
1.92 | 1.96 | n.a. |
- 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.
- 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.
- Capex after leases excluding spectrum licenses was down 6.8% year-on-year, amounting to HUF 49.0 billion in H1 2023, as higher spending associated with new fiber connections in Hungary was offset by lower network-related investments in both countries.
- Capex related to spectrum licenses amounted to HUF 0.6 billion, following the successful acquisition in May 2023 of 2*168 MHz frequency licenses in the 32 GHz frequency band to provide microwave connections. The licenses are valid for 15 years and include an option to extend for a further 5 years provided respective conditions are fulfilled. Spectrum fee amounted to HUF 0.3 billion and the present value of future annual band fees to HUF 0.3 billion.
3
- 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:
"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.
The success of our efforts to improve customer service are evident as despite facing cost pressures stemming primarily from the current macro environment, our EBITDA AL grew by 11.4% year-on-year in the first half of 2023.
Looking to the second half of the year, we remain committed to maintaining our solid market positions and operational momentum, allowing us to meet our public targets for Revenue, EBITDA AL and FCF whilst with regards to adjusted net income, we now target to reach a double-digit growth."
Public targets
2022 Actual | Public guidance for 2023 | Outlook for 2024 | ||
Revenue | HUF 746.7 billion | 5%-10% growth | mid-single digit growth | |
EBITDA AL | HUF 221.5 billion | 5%-10% growth | solid growth2 | |
Adjusted net income | HUF 63.0 billion | double-digit growth3 | dynamic growth | |
FCF1 | HUF 50.9 billion | ca. HUF 60 billion | dynamic growth | |
1 | Excluding spectrum licenses | |||
2 | Modified on June 1, 2023 due to extension of supplementary telecom.tax to 2024 | |||
3 | Modified from 'moderate growth' | |||
4
2. | MANAGEMENT REPORT | ||||||||
2.1. | Consolidated IFRS Group Results | ||||||||
2.1.1Group Profit and Loss | |||||||||
Q2 2022 | Q2 2023 | Change | Change | 1-6 months | 1-6 months | Change | Change | ||
(%) | 2022 | 2023 | (%) | ||||||
(HUF millions) | |||||||||
Mobile revenue | 105,345 | 121,328 | 15,983 | 15.2% | 206,901 | 233,634 | 26,733 | 12.9% | |
Fixed line revenue | 58,450 | 67,101 | 8,651 | 14.8% | 115,334 | 130,185 | 14,851 | 12.9% | |
SI/IT revenue | 18,701 | 19,661 | 960 | 5.1% | 34,316 | 40,141 | 5,825 | 17.0% | |
Revenue | 182,496 | 208,090 | 25,594 | 14.0% | 356,551 | 403,960 | 47,409 | 13.3% | |
Direct costs | (77,005) | (82,858) | (5,853) | (7.6%) | (150,162) | (164,641) | (14,479) | (9.6%) | |
Gross profit | 105,491 | 125,232 | 19,741 | 18.7% | 206,389 | 239,319 | 32,930 | 16.0% | |
Indirect costs | (47,586) | (49,311) | (1,725) | (3.6%) | (86,338) | (105,369) | (19,031) | (22.0%) | |
EBITDA | 57,905 | 75,921 | 18,016 | 31.1% | 120,051 | 133,950 | 13,899 | 11.6% | |
Depreciation and amortization | (35,219) | (34,896) | 323 | 0.9% | (70,588) | (68,478) | 2,110 | 3.0% | |
Operating profit | 22,686 | 41,025 | 18,339 | 80.8% | 49,463 | 65,472 | 16,009 | 32.4% | |
Net financial result | (6,513) | (11,992) | (5,479) | (84.1%) | (9,484) | (20,647) | (11,163) | (117.7%) | |
Share of associates' and joint ventures' results | - | - | - | - | 26 | - | (26) | (100.0%) | |
Profit before income tax | 16,173 | 29,033 | 12,860 | 79.5% | 40,005 | 44,825 | 4,820 | 12.0% | |
Income tax | (4,445) | (5,358) | (913) | (20.5%) | (8,935) | (9,375) | (440) | (4.9%) | |
Profit for the period | 11,728 | 23,675 | 11,947 | 101.9% | 31,070 | 35,450 | 4,380 | 14.1% | |
Profit attributable to non-controlling interests | 1,158 | 1,417 | 259 | 22.4% | 2,047 | 2,673 | 626 | 30.6% | |
Profit attributable to owners of the parent | 10,570 | 22,258 | 11,688 | 110.6% | 29,023 | 32,777 | 3,754 | 12.9% |
Total revenue increased by 14.0% year-on-year to HUF 208.1 billion in Q2 2023. This improvement was primarily driven by strong growth in mobile data and fixed broadband revenue reflecting the underlying business growth as well as the positive impact of the inflation-basedfee adjustment implemented to the Hungarian subscription fees from March 1, 2023. Total revenue in the first half of 2023 increased by 13.3% year-on-year,driven by the same factors and year-on-yearhigher System Integration and IT revenue during the first months of 2023.
- Mobile revenue rose by 15.2% year-on-year to HUF 121.3 billion in Q2 2023, driven by the continued growth in mobile data revenue coupled with increasing voice-retailrevenue.
- Voice retail revenue increased by 11.8% year-on-year to HUF 32.1 billion in Q2 2023 reflecting the positive impact of further customer base expansion in both countries and the Hungarian fee adjustment which offset reductions stemming from lower usage levels.
- Voice wholesale revenue decreased by 2.2% year-on-year to HUF 2.9 billion in Q2 2023, primarily driven by lower related revenue at the Hungarian operation due to further decline in the incoming traffic volumes.
- Data revenue rose by 28.6% year-on-year to HUF 46.0 billion in Q2 2023, as the continued growth in subscriber numbers and usage levels in both Hungary and North Macedonia were further amplified by the Hungarian fee adjustment impacts.
- SMS revenue was higher by 12.8% year-on-year, amounting to HUF 6.8 billion in Q2 2023, primarily reflecting the effect of the inflation-based fee adjustment.
- Mobile equipment revenue was stable year-on-year, amounting to HUF 28.5 billion in Q2 2023 as the combined results of higher average device prices in both operations counterbalanced by lower sales volume and the rise in the installment sales related present value discount in Hungary.
- Other mobile revenue rose by HUF 1.7 billion to HUF 5.0 billion in Q2 2023, driven by higher visitor revenue in both countries and the increased interest revenue component in relation to the equipment installment sales related present value discount.
5
| Attention: This is an excerpt of the original content. To continue reading it, access the original document here. |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Magyar Telekom Nyrt. published this content on 09 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 August 2023 16:06:02 UTC.
