Magyar Telecom B.V. Announces Financial Results for the First Quarter Ended March 31, 2015 and Investor Call

LONDON--()--Magyar Telecom B.V. (“Matel B.V.”) announced today that on May 14, 2015 (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 first quarter ended March 31, 2015. The Condensed Interim Consolidated Financial Statements of the Company is available at http://invitel.hu/english under “Investor Relations”.

The results for the first quarter ended March 31, 2015 reflect the consolidated financial results of Magyar Telecom B.V. and its subsidiaries (collectively, the “Company”) in accordance with International Financial Reporting Standards, as adopted by the E.U. (“IFRS”).

The reporting currency is euro (“EUR”), however the functional currency of operations is the Hungarian forint (“HUF”), being the currency of the primary economic environment in which the Company operates.

RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2015

When comparing the financial results for the first quarter ended March 31, 2015 to the financial results for the first quarter ended March 31, 2014, the reported results in euro have been affected by the difference between the average HUF/EUR exchange rates in the periods. The Hungarian forint depreciated against the euro by 0.3% with an average HUF/EUR exchange rate of 308.78 during the first quarter ended March 31, 2015 compared to the average HUF/EUR exchange rate of 307.90 during the first quarter ended March 31, 2014.

The Company’s revenue was EUR 37.4 million for the first quarter ended March 31, 2015 which represents a 1% increase compared to the first quarter ended March 31, 2014. Segment gross margin increased by 2% from EUR 29.3 million for the first quarter ended March 31, 2014 to EUR 30.0 million for the first quarter ended March 31, 2015. General operating expense decreased by 4% from EUR 23.3 million for the first quarter ended March 31, 2014 to EUR 22.4 million for the first quarter ended March 31, 2015. Income from operations changed to a loss of EUR 2.3 million for the first quarter ended March 31, 2015 from a loss of EUR 4.5 million for the first quarter ended March 31, 2014. Net result for the first quarter ended March 31, 2015 was a loss of EUR 6.5 million compared to a loss of EUR 9.2 million for the first quarter ended March 31, 2014.

Residential Voice – Residential Voice segment gross margin was EUR 6.0 million for the first quarter ended March 31, 2015, representing a decrease of 2% compared to the first quarter ended March 31, 2014. This decrease was mainly due to the decrease in our Residential Voice revenue as a result of the decrease in the number of our Residential Voice customers, although at a decreasing rate.

Residential Internet & TV – Residential Internet & TV segment gross margin was EUR 5.8 million for the first quarter ended March 31, 2015, representing an increase of 2% compared to the first quarter ended March 31, 2014. This increase was mainly due to the increase in the number of TV customers.

Cable - Cable segment gross margin was EUR 3.6 million for the first quarter ended March 31, 2015, representing an increase of 11% compared to the first quarter ended March 31, 2014, mainly due to the increase in our customer base and the improvement of ARPU.

Corporate – Corporate segment gross margin was EUR 10.1 million for the first quarter ended March 31, 2015, representing a decrease of 5% compared to the first quarter ended March 31, 2014. This lower margin was mainly due to the decrease in Corporate voice and data revenue, partially offset by the increase in our Corporate IT Services business.

Wholesale – Wholesale segment gross margin was EUR 4.5 million for the first quarter ended March 31, 2015, representing an increase of 20% compared to the first quarter ended March 31, 2014, which was attributable to the increase of dark fiber sales.

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 / (Loss) from Operations as per the Condensed Interim Consolidated Statement of Profit and Loss and Other Comprehensive Income / (Loss) in the Condensed Interim Consolidated Financial Statements the Company:

 

Reconciliation of Segment Gross Margin to Income / (Loss) from Operations

 
      Three months ended March 31,
(euro in millions) 2015   2014
 
Residential Voice 6.0 6.1
Residential Internet & TV 5.8 5.7
Cable 3.6 3.2
Corporate 10.1 10.6
Wholesale 4.5   3.7  
Segment gross margin 30.0 29.3
Network operating expenses (3.8 ) (4.1 )
Direct personnel expenses (2.0 ) (2.6 )
Selling, general and administrative expenses (16.6 ) (16.6 )
Depreciation and amortization (9.9 ) (10.6 )
Income (loss) from operations (2.3 ) (4.5 )
 

Other Financial Data

 
      Three months ended March 31,
(euro in millions) 2015   2014
 
Income (loss) from operations (2.3 ) (4.5 )
Depreciation and amortization 9.9   10.6  
EBITDA 7.6 6.1
 
Capex 5.1 5.5
 
Cash and Cash Equivalents at period end 21.7 19.6
 

Net cash provided by operations, which includes interest paid but excludes capital expenditure and debt repayments, was EUR 6.0 million for the first quarter ended March 31, 2015.

Commenting on the results, David Blunck, Chief Executive Officer of Invitel, the Company’s operating subsidiary, noted: “We delivered a solid set of results in the first quarter. This reflects continued successes of our TV and IT Services strategies. Against the backdrop of the improving Hungarian economy, we will continue to invest in these areas. We will upgrade roughly 120,000 homes to fiber this year. We are also launching a B2B investment program to expand our service offerings in the areas of IP-Networking, Unified Communications and IT Cloud services.”

CONFERENCE CALL

On May 14, 2015 (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 first quarter ended March 31, 2015.

You can participate in the conference call by dialing 0800-756-3429 (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://invitel.hu/english under “Investor Relations”. The webcast will be available for replay until August 15, 2015. In addition, a replay of the call will be available until May 28, 2015 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 (13607044).

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.

 

Magyar Telecom B.V.

Financial Highlights

(in millions of euro)

 
      Statement of Operations
 
Three months ended March 31,
2015   2014
 
Residential Voice 6.5 6.6
Residential Internet & TV 7.9 7.7
Cable 4.8 4.5
Corporate 12.8 13.6
Wholesale 5.5   4.5  
Total Revenue 37.4 36.9
 
Segment Cost of Sales 7.4 7.7
 
Income (Loss) from Operations (2.3 ) (4.5 )
 
Interest Expense 3.6 3.6
 
Foreign Exchange Gains (Losses), net - (0.4 )
 
Gains (Losses) on Derivative Financial Instruments 0.1 (0.1 )
 
Income (Loss) for the Period (6.5 ) (9.2 )
 

Magyar Telecom B.V.

Financial Highlights

(in millions of euro)

 
      Balance Sheet
 
 
March 31, December 31,
2015 2014
 
Cash and Cash Equivalents 21.7 20.8
Other Current Assets 21.9 20.7
Property, Plant and Equipment, net 193.1 188.2
Total Assets 263.3 254.9
 
Total Current Liabilities 40.7 36.5
Long Term Debt 154.6 154.6
Total Shareholders’ Equity 58.1 54.3
Total Liabilities and Shareholders’ Equity 263.3 254.9

Contacts

For Magyar Telecom B.V.
Andrea Rába
co-Chief Financial Officer, Invitel
Hungary: +36 1-801-1651

Release Summary

Magyar Telecom B.V. Announces Financial Results for the First Quarter Ended March 31, 2015 and Investor Call

Contacts

For Magyar Telecom B.V.
Andrea Rába
co-Chief Financial Officer, Invitel
Hungary: +36 1-801-1651