Magyar Telecom B.V. (“Matel B.V.”) announced today its financial results for the quarter ended March 31, 2013.
FIRST QUARTER 2013 RESULTS
The results for the quarter ended March 31, 2013 reflect the consolidated financial results of Magyar Telecom B.V. and its subsidiaries (collectively, the “Company”) in accordance with International Financial Reporting Standards (“IFRS”).
The reporting currency of the Company is the euro however the functional currency of operations is the Hungarian forint, being the currency of the primary economic environment in which the Company operates.
When comparing the financial results for the quarter ended March 31, 2013 to the financial results for the quarter ended March 31, 2012, the reported results in euro have been affected by the difference between the average HUF/EUR exchange rates in such periods. The Hungarian forint appreciated against the euro by 0.2% with an average HUF/EUR exchange rate of 296.42 during the quarter ended March 31, 2013 compared to the average HUF/EUR exchange rate of 296.97 during the quarter ended March 31, 2012. This change in exchange rates had an impact on Hungarian forint denominated earnings when converted into euro.
The Company’s revenue was EUR 39.7 million for the quarter ended March 31, 2013 compared to EUR 42.7 million for the quarter ended March 31, 2012, which represents a 7% decrease. Segment gross margin decreased by 9% from EUR 34.9 million for the quarter ended March 31, 2012 to EUR 31.5 million for the quarter ended March 31, 2013. General operating expense increased by 35% from EUR 19.5 million for the quarter ended March 31, 2012 to EUR 26.3 million for the quarter ended March 31, 2013, mainly as a result of new taxes introduced by the Hungarian government with an impact of EUR 7.1 million. Income / (loss) from operations decreased to a loss of EUR 6.7 million for the quarter ended March 31, 2013 from an income of EUR 1.9 million for the quarter ended March 31, 2012, mainly as a result of the decrease in segment gross margin and increase in general operating expense. Net result for the quarter ended March 31, 2013 was a loss of EUR 16.2 million compared to a loss of EUR 10.4 million for the quarter ended March 31, 2012.
Residential Voice – Residential Voice segment gross margin was EUR 7.4 million for the quarter ended March 31, 2013, representing a decrease of 15% compared to the quarter ended March 31, 2012. The decrease was mainly due to the decrease in Residential Voice revenue as a result of the decrease in the number of customers.
Residential Internet & TV – Residential Internet & TV segment gross margin was EUR 5.8 million for the quarter ended March 31, 2013, representing a decrease of 11% compared to the quarter ended March 31, 2012. This decrease is mainly due to decrease in Residential Internet gross margin due to lower ADSL revenue, which was partly offset by a slight increase in Residential TV gross margin mainly as a result of the increase in the number of customers.
Cable - Cable segment gross margin was EUR 3.0 million for the quarter ended March 31, 2013 compared to EUR 3.1 million for the quarter ended March 31, 2012 representing a decrease of EUR 0.1 million or 3%.
Corporate – Corporate segment gross margin was EUR 10.9 million for the quarter ended March 31, 2013 compared to EUR 11.3 million for the quarter ended March 31, 2012, representing a decrease of 4%. This decrease is mainly due to the decrease in Corporate voice revenue as a result of loss of lines and price erosion due to competition.
Wholesale – Wholesale segment gross margin was EUR 4.4 million for the quarter ended March 31, 2013 compared to EUR 5.3 million for the quarter ended March 31, 2012, representing a decrease of 17%, which is primarily attributable to the decrease of revenue of the sub 2M lines.
Segment gross margin is a non-IFRS financial measure, which is used by management to evaluate the performance of the business segments. The following table represents the reconciliation of segment gross margin to income from operations as per our interim consolidated statement of comprehensive income / (loss):
|Quarter ended March 31,|
|(euro in millions)||2013||2012|
|Residential Internet & TV||5.8||6.5|
|Segment Gross Margin||31.5||34.9|
|Network operating expenses||(4.8||)||(4.9||)|
|Direct personnel expenses||(2.8||)||(2.7||)|
|Selling, general and administrative expenses||(18.7||)||(11.9||)|
|Depreciation and amortization||(11.7||)||(12.9||)|
|Cost of restructuring||(0.2||)||(0.6||)|
|Income from operations||(6.7||)||1.9|
Net cash provided by operations, which includes interest paid but excludes capital expenditure and debt repayments, was EUR 9.6 million for the quarter ended March 31, 2013.
On May 8, 2013 (at 14:00 UK time, 15:00 CET, 9:00 AM ET), Matel B.V. will host a conference call to discuss financial results for the year ended December 31, 2012 and the first quarter ended March 31, 2013.
You can participate in the conference call by dialing 800-4626-6666 (UK toll free), +1-201-689-8049 (International) or +1-877-407-9210 (U.S. toll free) and referencing “Matel B.V.”.
A webcast of the call and the presentation materials will be available on Invitel’s website at http://english.invitel.hu/ under “Press/Investor Relations”. The webcast will be available for replay until August 8, 2013. In addition, a replay of the call will be available until May 22, 2013 at 11:59 PM ET. To access the replay of the call, please dial +1-877-660-6853 (U.S. toll free) or internationally dial +1-201-612-7415 and enter the conference ID (412353).
ABOUT MAGYAR TELECOM B.V.
Magyar Telecom B.V., through its subsidiary, Invitel is one of the leading service providers in the Hungarian telecommunications market, offering a broad portfolio of services for residential and business customers. Residential products include a variety of multimedia and entertainment services such as interactive, digital and High Definition television, fast internet offerings and telephony services. Business solutions include the most up-to-date ICT and cloud-based IT solutions, in addition to voice and data services, all using Invitel's nationwide fiber-optic backbone network. Invitel is headquartered in Budaörs, with customer touch points throughout Hungary.
The information above includes forward-looking statements about Magyar Telecom B.V. and its subsidiaries (“Matel B.V.”). These and all forward-looking statements are only predictions of current plans that are constantly under review by Matel B.V. Such statements are qualified by important factors that may cause actual results to differ from those contemplated, including those risk factors detailed in Matel B.V.’s Annual Reports, which may not be exhaustive. For a discussion of such risk factors, see Matel B.V.’s Annual Reports. Matel B.V. operates in a continually changing business environment and new risk factors emerge from time to time. Matel B.V. cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on its business or events described in any forward-looking statements. Matel B.V. has no obligation to publicly update or revise any forward-looking statements to reflect the occurrence of future events or circumstances. In addition, because Matel B.V. is no longer subject to certain reporting obligations with the SEC, and no longer intends to file or furnish any updates with the SEC.
Magyar Telecom B.V.
(in millions of euro)
Statements of Operations
|Segment Cost of Sales||8.2||7.8|
|Income (Loss) from Operations||(6.7||)||1.9|
|Foreign Exchange Gains (Losses), net||-||(1.4||)|
|Gains (Losses) on Derivative Financial Instruments||(0.3||)||(0.1||)|
|Net Income (Loss) for the Period||(16.2||)||(10.4||)|
Magyar Telecom B.V.
(in millions of euro)
|March 31,||December 31,|
|Property, Plant and Equipment, net||220.7||235.9|
|Total Current Liabilities||55.5||48.7|
|Long Term Debt||318.0||317.2|
|Total Shareholders’ Equity||(91.2||)||(65.1||)|
|Total Liabilities and Shareholders’ Equity||294.4||314.0|