MYTAY Magyar Telekom Telecommunications Plc (PK)

   By Margit Feher 

BUDAPEST--Magyar Telekom Nyrt. aims to raise its dividend to 25 forints (nine U.S. cents) a share this year, the company said Wednesday as it reported higher-than-expected fourth-quarter net profit.

The company last paid a dividend from its 2012 earnings at HUF50 a share.

Fourth-quarter earnings at Hungary's largest telecommunications provider by market share rose to HUF3.35 billion from HUF1.54 billion a year earlier, when a HUF2.5 billion one-time item subdued results.

The most-recent quarterly profit figure was significantly higher than the average forecast of HUF2.8 billion in a poll of five analysts by the company itself.

Deutsche Telekom AG (DTE.XE) has a 59.3% stake in Magyar Telekom.

Revenue, which is observed closely to see whether the company is capable of profiting from Hungary's rising domestic consumption, rose a hefty 10.7% to HUF182.88 billion on system-integration and information-technology performance. Solid growth in the fixed-line business also contributed to sales.

Earnings before interest, taxes, depreciation and amortization, a key indicator of profitability in the telecommunications sector, rose 4.5%, to HUF43.73 billion despite rising severance costs. It beat analysts' forecast for remaining unchanged at HUF41.9 billion.

The Ebitda margin, which analysts also watch closely, was 23.9%, down from 25.3% a year earlier and also lower than analysts' forecast for 25.1%.

The company beat its Ebitda and revenue guidance for all of last year. Ebitda rose 3.4% in 2015, "far exceeding guidance," the company said." Revenue, which was the highest last year since 2008, increased 4.8%, beating the company's forecast that it would remain little changed from 2014.

"Following a turnaround in revenue, margins and lately in Ebitda, we have returned to positive free cash flow generation in 2015. That will allow for the resumption of dividend payments," Magyar Telekom Chief Executive Christopher Mattheisen said.

The company said it aims to raise Ebitda this year to the HUF187 billion to HUF191 billion range and keep it between HUF189 billion and HUF193 billion next year.

A growing contribution from system integration and IT activities in all countries in which Magyar Telekom operates will play an important role in achieving rising Ebitda, the company said.

   Write to Margit Feher at margin.feher@wsj.com 
 

(END) Dow Jones Newswires

February 24, 2016 13:56 ET (18:56 GMT)

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