Welcome!

Mobile IoT Authors: Pat Romanski, Liz McMillan, Elizabeth White, Ed Featherston, Rostyslav Demush

News Feed Item

Magyar Telecom B.V. Announces Financial Results for the Year Ended December 31, 2013 and the Quarter Ended March 31, 2014 and Investor Call

Magyar Telecom B.V. (“Matel B.V.”) announced today that on May 16, 2014 (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 year ended December 31, 2013 and the quarter ended March 31, 2014.

The results for the year ended December 31, 2013 and the quarter ended March 31, 2014 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 YEAR ENDED DECEMBER 31, 2013

When comparing the financial results for the year ended December 31, 2013 to the financial results for the year ended December 31, 2012, 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 3% with an average HUF/EUR exchange rate of 296.92 during the year ended December 31, 2013 compared to the average HUF/EUR exchange rate of 289.42 during the year ended December 31, 2012.

The Company’s revenue was EUR 163.8 million for the year ended December 31, 2013 which represents a 6% decrease compared to the year ended December 31, 2012. Segment gross margin decreased by 10% from EUR 141.2 million for the year ended December 31, 2012 to EUR 126.6 million for the year ended December 31, 2013. General operating expense decreased by 6% from EUR 81.5 million for the year ended December 31, 2012 to EUR 77.0 million for the year ended December 31, 2013, mainly as a result of cost control. Income from operations changed to a loss of EUR 0.3 million for the year ended December 31, 2013 from a loss of EUR 27.4 million for the year ended December 31, 2012 mainly as a result of impairment loss of EUR 31.6 million recorded in 2012. Net result for the year ended December 31, 2013 was an income of EUR 54.0 million compared to a loss of EUR 74.9 million for the year ended December 31, 2012. The 2013 net result includes a gain of EUR 81.1 million on extinguishment of debt relating to the restructuring of the Company’s notes.

Residential Voice – Residential Voice segment gross margin was EUR 28.1 million for the year ended December 31, 2013, representing a decrease of 14% compared to the year ended December 31, 2012. The decrease was mainly due to lower acquisition ARPU of new customers.

Residential Internet & TV – Residential Internet & TV segment gross margin was EUR 23.6 million for the year ended December 31, 2013, representing a decrease of 8% compared to the year ended December 31, 2012. This decrease was mainly due to decrease in Residential Internet gross margin due to lower ADSL revenue, which is partly offset by an increase in Residential TV gross margin mainly as a result of the increase in IPTV customers.

Cable - Cable segment gross margin was EUR 12.8 million for the year ended December 31, 2013 representing an increase of 1% compared to the year ended December 31, 2012, indicating successful stabilization of this business (in HUF terms, Cable segment gross margin has increased by 4%).

Corporate – Corporate segment gross margin was EUR 43.5 million for the year ended December 31, 2013, representing a decrease of 6% compared to the year ended December 31, 2012. This decrease was mainly due to the decrease in Corporate voice and data revenue as a result of price erosion on contract renewals due to competition, partly offset by higher hosting and IT services revenue.

Wholesale – Wholesale segment gross margin was EUR 18.6 million for the year ended December 31, 2013, representing a decrease of 23% compared to the year ended December 31, 2012, which is primarily attributable to the decrease of revenue of the sub 2M lines and decreasing data revenue.

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 the Company:

    Year ended December 31,
(euro in millions) 2013  

2012
Restated

 
Residential Voice 28.1 32.8
Residential Internet & TV 23.6 25.7
Cable 12.8 12.6
Corporate 43.5 46.1
Wholesale 18.6 24.0
Segment gross margin 126.6 141.2
Network operating expenses (18.6) (20.2)
Direct personnel expenses (9.7) (11.3)
Selling, general and administrative expenses (48.7) (50.0)
Depreciation and amortization (48.6) (83.9)
Cost of restructuring (1.3) (3.2)
Income (loss) from operations (0.3) (27.4)
 

Net cash provided by operations, which includes interest paid but excludes capital expenditure and debt repayments, was EUR 41.8 million for the year ended December 31, 2013.

RESULTS FOR THE QUARTER ENDED MARCH 31, 2014

When comparing the financial results for the quarter ended March 31, 2014 to the financial results for the quarter ended March 31, 2013, 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 4% with an average HUF/EUR exchange rate of 307.90 during the quarter ended March 31, 2014 compared to the average HUF/EUR exchange rate of 296.42 during the quarter ended March 31, 2013.

The Company’s revenue was EUR 36.9 million for the quarter ended March 31, 2014 which represents a 7% decrease compared to the quarter ended March 31, 2013. Segment gross margin decreased by 7% from EUR 31.5 million for the quarter ended March 31, 2013 to EUR 29.3 million for the quarter ended March 31, 2014. General operating expense decreased by 13% from EUR 26.3 million for the quarter ended March 31, 2013 to EUR 23.0 million for the quarter ended March 31, 2014, mainly as a result of cost control initiatives. Income from operations changed to a loss of EUR 4.5 million for the quarter ended March 31, 2014 from a loss of EUR 6.7 million for the quarter ended March 31, 2013. Net result for the quarter ended March 31, 2014 was a loss of EUR 9.1 million compared to a loss of EUR 16.2 million for the quarter ended March 31, 2013.

Residential Voice – Residential Voice segment gross margin was EUR 6.1 million for the quarter ended March 31, 2014, representing a decrease of 18% compared to the quarter ended March 31, 2013. The decrease was mainly due to lower acquisition ARPU of new customers.

Residential Internet & TV – Residential Internet & TV segment gross margin was EUR 5.7 million for the quarter ended March 31, 2014, representing a decrease of 1% compared to the quarter ended March 31, 2013. This decrease was mainly due to decrease in Residential Internet gross margin due to lower ADSL revenue, which is partly offset by an increase in Residential TV gross margin mainly as a result of the increase in customer base.

Cable - Cable segment gross margin was EUR 3.2 million for the quarter ended March 31, 2014, representing an increase of 7% compared to the quarter ended March 31, 2013, mainly due to the increase in the number of customers.

Corporate – Corporate segment gross margin was EUR 10.6 million for the quarter ended March 31, 2014, representing a decrease of 3% compared to the quarter ended March 31, 2013. This decrease was mainly due to the decrease in Corporate voice revenue as a result of a decrease in traffic and price erosion on contract renewals due to competition.

Wholesale – Wholesale segment gross margin was EUR 3.7 million for the quarter ended March 31, 2014, representing a decrease of 15% compared to the quarter ended March 31, 2013, which is primarily attributable to the decrease of revenue of the sub 2M lines and decreasing data revenues.

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 Interim Consolidated Statement of Profit and Loss and Other Comprehensive Income / (Loss) in the interim consolidated financial statements the Company:

    Three months ended March 31,
(euro in millions) 2014   2013
 
Residential Voice 6.1 7.4
Residential Internet & TV 5.7 5.8
Cable 3.2 3.0
Corporate 10.6 10.9
Wholesale 3.7 4.4
Segment gross margin 29.3 31.5
Network operating expenses (4.1) (4.8)
Direct personnel expenses (2.6) (2.8)
Selling, general and administrative expenses (16.4) (18.7)
Depreciation and amortization (10.6) (11.7)
Cost of restructuring (0.1) (0.2)
Income (loss) from operations (4.5) (6.7)
 

Net cash provided by operations, which includes interest paid but excludes capital expenditure and debt repayments, was EUR 5.9 million for the quarter ended March 31, 2014.

Commenting on the results, David McGowan, Chief Executive Officer of Invitel, the Company’s operating subsidiary, noted: “With last year’s successful financial restructuring now behind us, the Company has been focusing on delivering on its bundling strategies. The 2013 and 2014 Q1 results released today demonstrate the continued progress made in TV-led bundling in the Residential segment and IT Services bundling in Corporate, as well as operational improvements in the other parts of the business.”

CONFERENCE CALL

On May 16, 2014 (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 year ended December 31, 2013 and the first quarter ended March 31, 2014.

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 18, 2014. In addition, a replay of the call will be available until May 29, 2014 at 11:59 PM ET. To access the replay of the call, please dial +1-877-407-7177 (U.S. toll free) or internationally dial +1-201-689-8016 and enter the conference ID (13581263).

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
   

Year ended
December 31,
2013

Year ended
December 31,
2012
Restated*

 
Residential Voice 30.8 36.5
Residential Internet & TV 32.0 32.1
Cable 17.6 16.9
Corporate 60.4 58.7
Wholesale 23.0   29.3  
Total Revenue 163.8 173.5
 
Segment Cost of Sales 37.2 32.3
 
Income (Loss) from Operations (0.3 ) (27.4 )
 
Interest Expense 26.0 38.7
 
Foreign Exchange Gains (Losses), net 0.4 (1.8 )
 
Gains (Losses) on Derivative Financial Instruments 0.6 (1.1 )
 
Gain on Extinguishment of Debt 81.1 0.0
 
Income (Loss) for the Year 54.0 (74.9 )
 

*: From January 1, 2013 the Group has changed its accounting policy with respect to sales commissions relating to the Corporate segment that are managed on portfolio basis. The comparative figures have been restated accordingly for the year ended December 31, 2012.

  Magyar Telecom B.V.
Financial Highlights

(in millions of euro)

 
Statement of Operations
   

Three months
ended
March 31,
2014

Three months
ended
March 31,
2013

 
Residential Voice 6.6 8.2
Residential Internet & TV 7.7 8.0
Cable 4.5 4.2
Corporate 13.6 13.9
Wholesale 4.5   5.4  
Total Revenue 36.9 39.7
 
Segment Cost of Sales 7.7 8.2
 
Income (Loss) from Operations (4.5 ) (6.7 )
 
Interest Expense 3.6 9.2
 
Foreign Exchange Gains (Losses), net (0.4 ) 0.0
 
Gains (Losses) on Derivative Financial Instruments (0.1 ) (0.3 )
 
Income (Loss) for the Period (9.1 ) (16.2 )
 
  Magyar Telecom B.V.
Financial Highlights

(in millions of euro)

 
Balance Sheet
   
March 31, December 31,
2014 2013
 
 
Current Assets 43.2 48.8
Property, Plant and Equipment, net 203.6 215.3
Total Assets 271.8 290.5
 
Total Current Liabilities 42.7 44.1
Long Term Debt 151.6 151.6
Total Shareholders’ Equity 67.1 83.7
Total Liabilities and Shareholders’ Equity 271.8 290.5

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution. In his session at @ThingsExpo, Akvelon expert and IoT industry leader Sergey Grebnov provided an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
Cloud-enabled transformation has evolved from cost saving measure to business innovation strategy -- one that combines the cloud with cognitive capabilities to drive market disruption. Learn how you can achieve the insight and agility you need to gain a competitive advantage. Industry-acclaimed CTO and cloud expert, Shankar Kalyana presents. Only the most exceptional IBMers are appointed with the rare distinction of IBM Fellow, the highest technical honor in the company. Shankar has also receive...
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abilit...
In his session at Cloud Expo, Alan Winters, U.S. Head of Business Development at MobiDev, presented a success story of an entrepreneur who has both suffered through and benefited from offshore development across multiple businesses: The smart choice, or how to select the right offshore development partner Warning signs, or how to minimize chances of making the wrong choice Collaboration, or how to establish the most effective work processes Budget control, or how to maximize project result...
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessio...
To Really Work for Enterprises, MultiCloud Adoption Requires Far Better and Inclusive Cloud Monitoring and Cost Management … But How? Overwhelmingly, even as enterprises have adopted cloud computing and are expanding to multi-cloud computing, IT leaders remain concerned about how to monitor, manage and control costs across hybrid and multi-cloud deployments. It’s clear that traditional IT monitoring and management approaches, designed after all for on-premises data centers, are falling short in ...
Organizations planning enterprise data center consolidation and modernization projects are faced with a challenging, costly reality. Requirements to deploy modern, cloud-native applications simultaneously with traditional client/server applications are almost impossible to achieve with hardware-centric enterprise infrastructure. Compute and network infrastructure are fast moving down a software-defined path, but storage has been a laggard. Until now.
DXWorldEXPO LLC announced today that the upcoming DXWorldEXPO | CloudEXPO New York event will feature 10 companies from Poland to participate at the "Poland Digital Transformation Pavilion" on November 12-13, 2018.
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
The best way to leverage your CloudEXPO | DXWorldEXPO presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering CloudEXPO | DXWorldEXPO will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at CloudEXPO. Product announcements during our show provide your company with the most reach through our targeted audienc...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...
DXWorldEXPO LLC announced today that All in Mobile, a mobile app development company from Poland, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. All In Mobile is a mobile app development company from Poland. Since 2014, they maintain passion for developing mobile applications for enterprises and startups worldwide.
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22nd international CloudEXPO | first international DXWorldEXPO and will feature technical sessions from a rock star conference faculty and the leading industry players in the world.
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...