Press Releases

Budapest, February 25, 2025 17:35

Magyar Telekom results for the fourth quarter of 2024
   

Magyar Telekom today reported its consolidated financial results for the fourth quarter and full year of 2024 , in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU. The financial report contains unaudited figures for each reporting period.

Highlights:

Total revenue increased by 11.9% year-on-year to HUF 256.5 billion in Q4 2024 , primarily driven by combined impact of continued strong demand for mobile data and fixed broadband services and the positive impact of the implemented inflation-based fee adjustment in Hungary.

• Mobile revenue rose by 13.1% year-on-year to HUF 148.9 billion in Q4 2024 , driven by the continued growth in mobile data usage as well as the favorable impacts of the inflation-based fee adjustment.
• Fixed line revenue increased by 11.8% year-on-year, to HUF 80.8 billion in Q4 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 6.2% year-on-year, amounting to HUF 26.8 billion in Q4 2024, thanks to higher revenue from major projects at the Hungarian operation.

Direct costs were broadly stable year-on-year, amounting to HUF 107.5 billion in Q4 2024, as higher equipment costs were mitigated by the absence of the one-off forward-looking bad debt related impairment recognized in the base period.

• Interconnect costs declined by 13.8% year-on-year to HUF 5.0 billion in Q4 2024, reflecting primarily the cut in the Hungarian mobile termination rates, effective from January 1, 2024.
• SI/IT service-related costs were up by 11.2% year-on-year, amounting to HUF 20.6 billion in Q4 2024, in line with the year-on-year higher project volumes.
• Impairment losses and gains on financial assets and contract assets (bad debt expenses) declined by HUF 3.3 billion, amounting to HUF 3.6 billion in Q4 2024 as increases driven by the higher revenue base was offset by the absence of the one-off HUF 3.5 billion forward-looking impairment recognized in Q4 2023.
• Telecom tax declined by 3.0% year-on-year, amounting to HUF 6.2 billion in Q4 2024, driven by the overall decline in fixed voice usage coupled with reduction in mobile voice traffic generated by business customers.
• Other direct costs were up by 4.4% year-on-year at HUF 72.2 billion in Q4 2024, as a combined result of higher equipment costs, in line with higher related sales and increase in TV content fees.
  

Gross profit improved by 21.6% year-on-year to HUF 149.0 billion in Q4 2024, thanks to improvement in service revenue that was coupled with broadly unchanged direct costs.

Indirect costs were up by 27.7% year-on-year, at HUF 63.5 billion in Q4 2024, driven by increase along most major cost lines.

• Employee-related expenses increased by 30.7% year-on-year, amounting to HUF 29.7 billion in Q4 2024, as a result of the wage increase in effect from May 1, 2024 at the Hungarian operation and from January 1, 2024 at the North Macedonian operation, as well as the one-off bonus expenses at the Hungarian operation.
• Supplementary telecommunication tax was up by HUF 1.5 billion, amounting to HUF 9.2 billion in Q4 2024, in line with the corresponding revenue increase.
• Other operating expenses (excluding supplementary telecommunication tax) increased by 28.2% year-on-year to HUF 28.0 billion in Q4 2024, as a result of higher marketing expenses and increase in maintenance and repair costs that was coupled with the unfavorable impacts from the weakening of the forint.
• Other operating income increased by HUF 0.8 billion year-on-year, amounting to HUF 3.4 billion in Q4 2024, driven by higher income received for relocation and reconstruction of own network and a legal case related one-off income.
  

EBITDA increased by 17.5% year-on-year to HUF 85.5 billion in Q4 2024, driven by the improvement in gross profit. EBITDA AL was up by 18.7% year-on-year to HUF 77.6 billion in Q4 2024.

Depreciation and amortization (‘D&A’) expenses were lower by 3.2% year-on-year, amounting to HUF 34.8 billion in Q4 2024, driven by increases in the useful life of different asset classes.

Profit for the period rose by 55.5% year-on-year to HUF 37.8 billion in Q4 2024, driven primarily by the growth in EBITDA.

• Net financial result improved from a loss of HUF 8.1 billion in Q4 2023 to a loss of HUF 5.1 billion in Q4 2024. Year-on-year lower net interest expense was primarily attributable to a reduction in the overall debt levels as well as to lower average interest rates. The favorable change in other finance expense year-on-year reflects the more favorable results on the measurement of derivatives at fair value that offset the majority of the FX-losses related to the forint weakening during the fourth quarter of 2024.
• Income tax expenses were up by 74.4% year-on-year at HUF 7.8 billion in Q4 2024, primarily driven by year-on-year higher profit levels.

Profit attributable to non-controlling interests increased by 43.6% year-on-year to HUF 1.5 billion in Q4 2024 , reflecting the improvement in the operational results at the North Macedonian subsidiary.

Adjusted net income (profit attributable to owners of the parent) was HUF 34.6 billion in Q4 2024 vs HUF 25.8 billion in Q4 2023, reflecting the improvements in underlying profitability. Negative adjustments to the reported net income of HUF 1.7 billion in Q4 2024 are reflecting unrealized gains related to measurement of derivatives at fair value.

Free cash flow, excluding spectrum license fees, increased to HUF 165.1 billion for the full year of 2024 (2023: HUF 86.8 billion), reflecting strong improvement in profitability.

The Board of Directors proposes a dividend payment of HUF 90.9 billion for the 2024 financial year, subject to approval at the Company’s Annual General Meeting on April 15, 2025. Additionally, the Board envisages a share buyback of up to HUF 39.1 billion, which, together with dividends, implies a payout ratio of up to 80% of the Group's adjusted net income.

Tibor Rékasi, Magyar Telekom CEO commented: 

“2024 was a remarkable year for Magyar Telekom. Our steadfast commitment to digital transformation, customer-centric focus, and resilience enabled us to exceed 3.8 million gigabit-capable access points by year-end. We also successfully completed the multi-year radio network modernization project and full upgrade of our CRM system architecture.

Our dedication to meeting the sustained strong demand for data and connectivity, combined with the positive effects of inflation-based fee adjustments, drove a notable revenue increase of 13.9% compared to 2023. Strong operational performance and disciplined cost management contributed to a year-on-year EBITDA AL growth of 29.1% and a Group adjusted net income increase of 73.7% year-on-year. Driven by this strong performance, the Board has proposed a record-high total annual shareholder remuneration for FY24, comprising a total dividend payment of HUF 90.9 billion and a share buyback of up to HUF 39.1 billion.

Looking ahead to 2025, our strategic priorities remain unchanged. The success achieved in digital transformation lays a strong foundation for the future. Combined with further inflation-based fee adjustments, this will support our goal of achieving revenue growth of 1%-3% in FY25. Furthermore, with the positive impact from the elimination of the supplementary telecommunication tax from 2025, we expect EBITDA AL to grow 12-15%. Our guidance for adjusted net income is approximately HUF 190 billion, with projected free cashflow generation of around HUF 180 billion.”

 

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