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Investor News

Magyar Telekom second quarter 2021 results

Budapest, August 10, 2021 17:30

Magyar Telekom (Reuters: MTEL.BU and Bloomberg: MTELEKOM HB), the leading Hungarian telecommunications service provider, today reported its consolidated financial results for the second quarter and first half of 2021, in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU (hereinafter: half-year report). The half-year report contains unaudited figures for each reporting period.

Financial highlights:

Financial results

  • Revenues grew by HUF 9.0 billion, or 5.7% year-on-year to HUF 166.1 billion in Q2 2021, with increasing mobile and fixed service contribution driving positive momentum versus the same quarter and half year of 2020
  • Gross profit also improved substantially by HUF 6.3 billion year-on-year to HUF 96.5 billion in Q2 2021 driven by increasing top line contribution
  • Indirect costs increased year-on-year in Q2 2021, but remained stable in H1 2021 compared to H1 2020. EBITDA AL increased to HUF 53.2 billion in Q2 2021 and to HUF 97.4 billion H1 2021, representing a 6.1% and 7.0% uplift respectively year-on-year and year-to-date mainly driven by improving gross profit
  • Capex AL excluding spectrum licenses decreased slightly year-on-year to HUF 23.2 billion in Q2 2021 and amounted to HUF 43.2 billion in H1 2021. A further HUF 83.1 billion was recognized as spectrum Capex following the completion of the auction of the 900 MHz and 1800 MHz frequency bands in Q1 2021. As a result, Capex AL including spectrum licenses reached HUF 126.3 billion in H1 2021
  • Free cash flow excl. spectrum licenses (i.e. without one-time spectrum license fees) amounted to HUF 10.3 billion in H1 2021 representing an increase of HUF 6.9 billion against the base period mainly in line with stronger EBITDA generation
  • Net debt amounted to HUF 504.0 billion at the end of H1 2021, as strong operating cash flow generation was partly offset by the above-mentioned spectrum capitalization in Q1 2021; dividend outpayments and the share buyback transaction with a combined cash outflow of HUF 25.5 billion during Q2 2021

Operational highlights

  • Highest ever mobile data traffic recorded on our network whilst average data consumption surged by 25% year-on-year to 7.2 GB / month in Q2 2021 in Hungary
  • Strong monetization of our fixed network development with 23% of our customers connected to the network with Gigabit speed packages
  • The results of Magyar Telekom’s latest sustainability cycle covering the 2016-2020 period were unveiled, detailing the sustainability strategy with respect to digital sustainability, climate protection, equal opportunity and diversity measures

Tibor Rékasi, Magyar Telekom CEO commented:

“During the second quarter, we leveraged the improving trends in our operating environment as the impact of COVID-19 diminished on our market and Magyar Telekom’s operations throughout the quarter. In line with our strategy, we took further steps in implementing our ‘Digitize Hungary’ framework by launching a digital development initiative tailored for SMEs. In parallel, our network development continued at pace covering 2.75 million access points with the Gigabit capable network.

This strong momentum across our operations is reflected in our financial performance in the quarter, which saw broad-based growth in both revenues and EBITDA year-on-year as we continued to successfully monetize the robust market demand for telecommunications services and data. Looking ahead to the second half and taking into account this strong set of results, we believe we are well positioned to outperform our originally communicated revenue and EBITDA growth targets for 2021.”


Public guidance

This investor news contains forward-looking statements. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore should not have undue reliance placed upon them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Such factors are described in, among other things, our annual financial statements for the year ended December 31, 2020, available on our website at which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and adopted by the European Union.