LONDON--(BUSINESS WIRE)--Magyar Telecom B.V. (“Matel B.V.”) today announced its financial results for the first quarter ended March 31, 2016. The Condensed Interim Consolidated Financial Statements of the Company is available at http://invitel.hu/english under “Investor Relations”. Matel B.V. will host a conference call today (at 14:00 UK time, 15:00 CET, 9:00 a.m. ET) to discuss the results.
RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2016
When comparing the financial results for the first quarter ended March 31, 2016, to the financial results for the first quarter ended March 31, 2015, the reported results in euro have been affected by the difference between the average HUF/EUR exchange rates. The Hungarian forint depreciated against the euro by 1.0% with an average HUF/EUR exchange rate of 312.02 during the first quarter ended March 31, 2016, compared to the average HUF/EUR exchange rate of 308.78 during the first quarter ended March 31, 2015.
The Company’s revenue was EUR 35.5 million for the first quarter ended March 31, 2016, which represents a 5% decrease compared to the first quarter ended March 31, 2015. Segment gross margin decreased by 7% from EUR 30.0 million for the first quarter ended March 31, 2015, to EUR 27.8 million for the first quarter ended March 31, 2016. General operating expenses decreased by 11% from EUR 22.4 million for the first quarter ended March 31, 2015, to EUR 20.0 million for the first quarter ended March 31, 2016. Results from operations changed to a loss of EUR 1.4 million for the first quarter ended March 31, 2016, from a loss of EUR 2.3 million for the first quarter ended March 31, 2015, mainly as a result of lower general operating expenses and lower depreciation. Net result for the first quarter ended March 31, 2016, was a loss of EUR 5.6 million compared to a loss of EUR 6.5 million for the first quarter ended March 31, 2015.
Copper – Copper segment gross margin was EUR 7.7 million for the first quarter ended March 31, 2016, representing a decrease of 12% compared to the first quarter ended March 31, 2015. This decrease was mainly due to the decrease in the number of Voice subscriptions, and the impact of copper customers migrated to fiber in the past 12 months, compensated in part by higher Average Revenue Per Unit (“ARPU”).
Fiber – Fiber segment gross margin was EUR 2.6 million for the first quarter ended March 31, 2016, representing an increase of 53% compared to the first quarter ended March 31, 2015. The increase was mainly due to increase in the number of subscriptions.
Cable – Cable segment gross margin was EUR 3.6 million for the first quarter ended March 31, 2016, representing an increase of 3% compared to the first quarter ended March 31, 2015, due to the increase in customer base and the improvement of ARPU.
Offnet – Offnet segment gross margin was EUR 0.5 million for the first quarter ended March 31, 2016, representing a decrease of 29% compared to the first quarter ended March 31, 2015. This lower margin was mainly due to the decrease in Offnet voice revenue as a result of the decrease in traffic and customer numbers.
Small Business – Small Business segment gross margin was EUR 1.5 million for the first quarter ended March 31, 2016, representing a decrease of 12% compared to the first quarter ended March 31, 2015. This decrease was due to the decrease in our customer base and lower ARPU.
Corporate – Corporate segment gross margin was EUR 7.9 million for the first quarter ended March 31, 2016, representing a decrease of 3% compared to the first quarter ended March 31, 2015. This lower margin was mainly due to the decrease in traditional voice revenue as a result of the decrease in traffic and data revenues due to the price erosion on contract renewals, which was offset by the margin realized on next generation services like Datacenter and IT Services.
Wholesale – Wholesale segment gross margin was EUR 4.0 million for the first quarter ended March 31, 2016, representing a decrease of 27% compared to the first quarter ended March 31, 2015. This decrease is due to the decrease in dark fiber sales and leased line services which were partially offset by higher Wholesale voice transit and network replacement projects.
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 Consolidated Statement of Profit and Loss and Other Comprehensive Income / (Loss) in the Consolidated Financial Statements of the Company:
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Reconciliation of Segment Gross Margin to Income / (Loss) from Operations |
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Three months ended March 31, |
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| (euro in millions) | 2016 | 2015 | ||
| Copper | 7.7 | 8.8 | ||
| Fiber | 2.6 | 1.7 | ||
| Cable | 3.6 | 3.5 | ||
| Offnet | 0.5 | 0.7 | ||
| Small Business | 1.5 | 1.7 | ||
| Corporate | 7.9 | 8.1 | ||
| Wholesale | 4.0 | 5.5 | ||
| Segment gross margin | 27.8 | 30.0 | ||
| Network operating expenses | (4.1) | (4.1) | ||
| Direct personnel expenses | (2.2) | (2.0) | ||
| Selling, general and administrative expenses | (13.7) | (16.3) | ||
| Depreciation and amortization | (9.2) | (9.9) | ||
| Income / (loss) from operations | (1.4) | (2.3) | ||
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Other Financial Data |
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| Three months ended March 31, | ||||
| (euro in millions) | 2016 | 2015 | ||
| Income / (loss) from operations | (1.4) | (2.3) | ||
| Depreciation and amortization | 9.2 | 9.9 | ||
| EBITDA | 7.8 | 7.6 | ||
| Capex | 6.8 | 5.1 | ||
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Cash and Cash Equivalents at period end |
22.0 | 21.7 | ||
Net cash provided by operations, which includes interest paid but excludes capital expenditure was EUR 7.3 million for the first quarter ended March 31, 2016.
APPOINTMENT OF CHIEF FINANCIAL OFFICER
Matel B.V. is announcing the appointment of Ákos Balogh as Chief Financial Officer of Invitel Zrt, its operating subsidiary. Mr. Balogh has over two decades of experience in international finance and business development roles. His career has included headquarters, regional and country assignments in six countries with companies such as Sandoz/Novartis, Philip Morris International and GE. Prior to joining Invitel, Mr. Balogh served as regional CFO for two firms in the payments processing sector, including Euronet Worldwide.
INVITEL CEO COMMENTS
Commenting on the results, David Blunck, Chief Executive Officer of Invitel noted: “The first quarter results were in line with our expectations. EBITDA and our cash balance were both up in the quarter, although, due primarily to one-time items, Adjusted EBITDA (our preferred measure of operating performance) was down slightly versus the same period in 2015. We are confirming our expectation of slight EBITDA growth for 2016, following EBITDA growth for the full year 2015. I am also pleased that Ákos Balogh is joining the Invitel management team as CFO. Our net result has improved year-on-year in each of the nine quarters since the 2013 restructuring. Ákos’ experience and leadership will help us continue this turnaround.”
CONFERENCE CALL
On May 19, 2016 (at 14:00 UK time, 15:00 CET, 9:00 a.m. ET), Matel B.V. will host a conference call to discuss financial results for the first quarter ended March 31, 2016.
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”.
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 IT and Datacenter services 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.
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Magyar Telecom B.V. |
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| Three months ended March 31, | ||||
| 2016 | 2015 | |||
| Copper | 9.0 | 10.2 | ||
| Fiber | 3.4 | 2.2 | ||
| Cable | 4.9 | 4.7 | ||
| Offnet | 1.1 | 1.3 | ||
| Small Business | 1.6 | 1.8 | ||
| Corporate | 10.8 | 10.6 | ||
| Wholesale | 4.7 | 6.6 | ||
| Total Revenue | 35.5 | 37.4 | ||
| Segment Cost of Sales | 7.7 | 7.4 | ||
| Income/(Loss) from Operations | (1.4) | (2.3) | ||
| Interest Expense | 3.6 | 3.6 | ||
| Income/(Loss) for the Period | (5.6) | (6.5) | ||
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Balance Sheet |
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| At March 31, | ||||
| 2016 | 2015 | |||
| Cash and Cash Equivalents | 22.0 | 21.7 | ||
| Other Current Assets | 18.8 | 21.9 | ||
| Property, Plant and Equipment, net | 182.5 | 193.1 | ||
| Total Assets | 246.6 | 263.3 | ||
| Total Current Liabilities | 43.9 | 40.7 | ||
| Long Term Debt | 157.7 | 154.6 | ||
| Total Shareholders’ Equity | 36.4 | 58.1 | ||
| Total Liabilities and Shareholders’ Equity | 246.6 | 263.3 | ||