MAGYAR TELECOM B.V. Puskas Tivadar u H-2040 Budaors, Hungary Phone (361) Fax (361)

Transcription

1 MAGYAR TELECOM B.V. Puskas Tivadar u H-2040 Budaors, Hungary Phone (361) Fax (361) FOR: MAGYAR TELECOM B.V. COMPANY CONTACT: Andrea Rába Financial Reporting Senior Manager of Invitel Hungary: FOR IMMEDIATE RELEASE MAGYAR TELECOM B.V. ANNOUNCES THE FINANCIAL RESULTS FOR THE PERIOD ENDED SEPTEMBER 30, 2012 AND INVESTOR CALL LONDON (BUSINESS WIRE) November 21, 2012 Magyar Telecom B.V. ( Matel B.V. ) announced today its financial results for the nine months ended September 30, RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 The results for the nine months ended September 30, 2012 reflect the consolidated financial results of Matel B.V. and its subsidiaries (collectively, the Company ) in accordance with International Financial Reporting Standards ( IFRS ). The reporting currency of the Company is euro ( EUR ), however the functional currency of continued operations is the Hungarian forint ( HUF ), being the currency of the primary economic environment in which the Company operates. When comparing the financial results for the nine months ended September 30, 2012 to the financial results for the nine months ended September 30, 2011, the reported results in euro have been affected by the difference between the average HUF/EUR exchange rates during

2 these periods. The Hungarian forint depreciated against the euro by 7% with an average HUF/EUR exchange rate of during the nine months ended September 30, 2012 compared to the average HUF/EUR exchange rate of during the nine months ended September 30, This change in exchange rates had an impact on Hungarian forint denominated earnings when converted into euro. The Company s revenue was EUR million for the nine months ended September 30, 2012 which represents a 14% decrease compared to the nine months ended September 30, Segment gross margin decreased by 14% from EUR million for the nine months ended September 30, 2011 to EUR million for the nine months ended September 30, General operating expense decreased by 1% from EUR 61.1 million for the nine months ended September 30, 2011 to EUR 60.2 million for the nine months ended September 30, Income from operations decreased to EUR 2.5 million for the nine months ended September 30, 2012 from EUR 12.6 million for the nine months ended September 30, 2011, mainly as a result of the decrease in segment gross margin. Net result for the nine months ended September 30, 2012 was a net loss of EUR 34.5 million compared to a net income of EUR 16.0 million for the nine months ended September 30, 2011, which includes the gain of EUR 28.5 million accounted for in relation to the acquisition of Fibernet. Residential Voice Residential Voice segment gross margin was EUR 25.1 million for the nine months ended September 30, 2012, representing a decrease of 27% compared to the nine months ended September 30, The decrease was mainly due to the decrease in our Residential Voice revenue as a result of the decrease in the number of customers mainly outside our historical concession areas, the decrease in traffic both in and outside of our historical concession areas as customers optimizing their usage and the 7% depreciation of the

3 HUF against the EUR during the nine months ended September 30, 2012 compared to the prior year. Residential Internet Residential Internet segment gross margin was EUR 19.4 million for the nine months ended September 30, 2012, representing a decrease of 10% compared to the nine months ended September 30, This decrease was mainly due to the lower broadband internet revenues as a result of decreasing ARPU and the 7% depreciation of the HUF against the EUR during the nine months ended September 30, 2012 compared to the prior year. Cable - Cable segment gross margin was EUR 9.4 million for the nine months ended September 30, 2012, representing an increase of 12% compared to the nine months ended September 30, The Cable segment was introduced as of March 1, 2011 and relates to the revenue generated by the ex-fibernet business. Corporate Corporate segment gross margin was EUR 35.2 million for the nine months ended September 30, 2012, representing a decrease of 9% compared to the nine months ended September 30, The decrease was mainly due to the decrease in Corporate voice revenue as a result of price erosion due to competition and the 7% depreciation of the HUF against the EUR during the nine months ended September 30, 2012 compared to the prior year. Wholesale Wholesale segment gross margin was EUR 16.3 million for the nine months ended September 30, 2012, representing a decrease of 15% compared to the nine months ended September 30, 2011, which is mainly due to the decrease in small bandwidth wholesale leased line revenue and the 7% devaluation of the HUF against the EUR compared to the prior year.

4 Segment gross margin is a non-ifrs financial measure, which is used by management in evaluating the performance of the business segments. The following table represents the reconciliation of segment gross margin to income from operations as per the Consolidated Statement of Comprehensive Income / (Loss) of the Company: Nine months ended September 30, (euro in millions) Residential Voice Residential Internet Cable Corporate Wholesale Segment Gross Margin Network operating expenses (15.2) (15.8) Direct personnel expenses (8.2) (9.2) Selling, general and administrative expenses (36.8) (36.1) Depreciation and amortization (40.2) (43.7) Cost of restructuring (2.5) (4.6) Income from operations Net cash provided by operations, which includes interest paid but excludes capital expenditure and debt repayments, was EUR 24.4 million for the nine months ended September 30, COMMENTS FROM DAVID McGOWAN Commenting on the financial results, David McGowan, Chief Executive Officer of Invitel said, Poor general economic conditions in Hungary continue to affect demand for our services in both our Residential and Corporate segments, especially for our voice product, which continues to decline as customers have increasingly optimized usage. In spite of these trends and the heightened number of company liquidations in Hungary during the period, our Corporate business continues to grow its customer base and market share through an increased use of bundled ICT services, and our Residential business is having success in settlements

5 where we have been able to upgrade our network capacities. The introduction of new sector taxes has also had an impact during the period, and we are improving our efficiency and maintaining tight control of operating expenses. CONFERENCE CALL On November 21, 2012 (at 15:00 UK time, 16:00 CET, 10:00 AM ET), Matel B.V. will host a conference call to discuss financial results for the period ended September 30, You can participate in the conference call by dialing (UK toll free), (International) or (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 under Press/Investor Relations. The webcast will be available for replay until February 15, In addition, a replay of the call will be available until December 5, 2012 at 11:59 PM ET. To access the replay of the call, please dial (U.S. toll free) or internationally dial and enter account (286) followed by the replay access code (401194).

6 Magyar Telecom B.V. Financial Highlights (in millions of euro) Statements of Operations Nine months ended September 30, 2012 Nine months ended September 30, 2011 Residential Voice Residential Internet Cable Corporate Wholesale Total Revenue Segment Cost of Sales Income (Loss) from Operations Interest Expense Foreign Exchange Gains (Losses), net (1.4) (1.7) Gains (Losses) on Derivative Financial Instruments (0.6) 3.2 Net income (loss) for the Period (34.5) 16.0

7 Magyar Telecom B.V. Financial Highlights (in millions of euro) Balance Sheet September 30, December 31, Current Assets Property, Plant and Equipment, net Total Assets Total Current Liabilities Long Term Debt Total Shareholders Equity (13.1) (14.4) Total Liabilities and Shareholders Equity

8 ABOUT MAGYAR TELECOM B.V. Magyar Telecom B.V., through its subsidiary, Invitel, is one of Hungary s leading telecommunications and info-communications service providers. It provides 20 thousand satisfied business clients with a broad portfolio of media, telecommunication, and infocommunication services; on the other hand Invitel has 750 thousand residential and SOHO subscriptions on the digital TV, internet and voice services market. The number of its wholesale partners exceeds 250. In its customer service offices, called Telepoints, Invitel is directly available to residential customers at 27 different sites throughout Hungary, while the work of business partners is supported by skilled account managers through continuous personal communication. The Company is headquartered in Budaörs. Forward-Looking Statements The information above includes forward-looking statements about Magyar Telecom B.V. and its subsidiaries ( Matel B.V. ). These and all forward-looking statements are only predictions of current plans that are constantly under review by Matel B.V. Such statements are qualified by important factors that may cause actual results to differ from those contemplated, including those risk factors detailed in Matel B.V. s Annual Reports, which may not be exhaustive. For a discussion of such risk factors, see Matel B.V. s Annual Reports. Matel B.V. operates in a continually changing business environment and new risk factors emerge from time to time. Matel B.V. cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on its business or events described in any forwardlooking statements. Matel B.V. has no obligation to publicly update or revise any forwardlooking statements to reflect the occurrence of future events or circumstances. In addition, because Matel B.V. is no longer subject to certain reporting obligations with the SEC, and no longer intends to file or furnish any updates with the SEC.