Magyar Telekom - Strong Results, Total RGU Has Exceeded 10M

Strong results, Total RGU has exceeded 10M

 

• MTEL continued to post remarkable results, which this time as well has beat consensus on most of the lines. Net profit came to HUF 17.1 bn vs. cons of HUF 15.6 bn and vs. HUF 17.8 bn compared to last year’s profit when there was no windfall tax. Excluding windfall tax quarterly profit could have reached HUF 23 bn +28% y-o-y.
• 9M profit arrived to HUF 46 bn vs our FY forecast of HUF 50 bn, now we believe that it should be a touch below HUF 60 bn, implying a 35 – 47 distributable profit and 11.6 – 15.4% yield.
  • Key positives:

1. Management updated its FY revenue forecast from a growth of 1-3% to 5% (9m rev. growth @ 9% y-o-y). Other lines of the guidance remain unchanged, implying the usual conservative stance from management.
2. In Q3 MTEL Total RGU exceeded 10mn, three years ago this number was below 9mn. On a quarterly basis they even accelerated the growth. The company has been clearly gaining market share in HU.
3. ARPU also increased by on average of 1.5% q-o-q (this is not related to inflation indexation, just a result of migrating to higher quality packages)
   • Key negatives:
4. Higher net financials due to weak FX (HUF 8bn vs. usual HUF 4bn).