MAGYAR TELEKOM RESULTS FOR THE SECOND QUARTER OF 2024
Budapest, August 7, 2024 17:35
Magyar Telekom today reported its consolidated financial results for the second quarter and first half of 2024, in accordance with IFRS Accounting Standards as endorsed by the EU. The half-year report contains unaudited figures.
Highlights:
Total revenue increased by 15.6% year-on-year to HUF 240.6 billion in Q2 2024 . This improvement was driven by the combined impact of continued strong demand for mobile data and fixed broadband services and the positive impact of the inflation-based fee adjustment in Hungary leading to higher subscription fee revenue across all service lines. These increases were coupled with higher mobile equipment sales and increase in SI/IT revenue, both reflecting favorable external impacts.
Mobile revenue rose by 15.9% year-on-year to HUF 140.6 billion in Q2 2024 , driven by the continued growth in mobile data revenue and higher equipment sales.
Fixed line revenue increased by 14.6% year-on-year, to HUF 76.9 billion in Q2 2024, reflecting the increases in fixed broadband and TV revenue driven by the customer base expansions as well as the favorable impact of the inflation-based fee adjustment applied to the Hungarian subscription fees.
System Integration and IT ( SI/IT') revenue rose by 17.4% year-on-year, amounting to HUF 23.1 billion in Q2 2024, thanks to higher revenue from major projects at the Hungarian operation.
Direct costs were up by 7.6% year-on-year at HUF 89.1 billion in Q2 2024, primarily driven by higher equipment costs, parallel to the increase in sales.
Gross profit improved by 20.9% year-on-year to HUF 151.5 billion in Q2 2024, thanks to higher service revenue partly mitigated by increase in the equipment sales related costs.
Indirect costs were up by 10.2% year-on-year, at HUF 54.3 billion in Q2 2024, primarily driven by higher employee related expenses in both operations.
EBITDA increased by 28.0% year-on-year to HUF 97.2 billion in Q2 2024 driven by the improvement in gross profit. EBITDA AL was up by 30.9% year-on-year to HUF 89.8 billion in Q2 2024.
Depreciation and amortization ( D&A') expenses were up by 2.9% year-on-year, amounting to HUF 35.9 billion in Q2 2024, reflecting higher depreciation related to software licenses.
Profit for the period rose by 88.6% year-on-year to HUF 44.6 billion in Q2 2024 driven primarily by the growth in EBITDA.
Profit attributable to non-controlling interests decreased by 9.7% year-on-year to HUF 1.3 billion in Q2 2024 , reflecting the increase in indirect costs at the North Macedonian subsidiary.
Capex after lease excluding spectrum licenses amounted to HUF 46.3 billion in H1 2024, representing a 6.6% reduction year-on-year , driven by different within-year dynamic of the annual CPE procurements in Hungary coupled with lower network investments and seasonally lower TV content capitalization costs in North Macedonia.
Free cash flow, excluding spectrum license fees, amounted to HUF 36.7 billion in H1 2024, representing an improvement of HUF 29.4 billion year-on-year attributable to growth in profitability partially mitigated by higher working capital needs related to the expanding revenue base and different vendor outpayment dynamics . .
Tibor R kasi, Magyar Telekom CEO commented:
I am delighted to report a strong set of results for the second quarter of 2024. Central to Magyar Telekom's success is our customer-centric approach and our ability to provide a gigabit experience on our fixed and mobile networks. By the halfway point of 2024, we had reached 3.8 million households and businesses with gigabit-capable fixed technology. We increased our outdoor population-based 5G coverage to reach 70%, and we made further progress in the radio network modernization of our mobile network, reaching 87% readiness.
Operationally, our network provides an excellent foundation to ensure outstanding customer experience and fulfill our customers' data needs. Financially, I am pleased to report that in the second quarter revenue increased by 15.6% year-on-year, while EBITDA AL grew by 30.9% due to strong revenue generation and the success of our cost mitigation initiatives.
Looking ahead, this strong performance and more favorable commercial outlook means that we are now targeting revenue growth of approximately 10% and EBITDA AL growth of approximately 25% for full year 2024. Consequently, we are also upgrading our guidance for adjusted net income to approximately HUF 150 billion, with a projected free cashflow generation of approximately HUF 140 billion.
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MAGYAR TELEKOM RESULTS FOR THE SECOND QUARTER OF 2024 
