Magyar Telekom Q126 Review
▪ Q1 revenue declined 1.5% y/y to HUF 238 billion, broadly in line with consensus; the shortfall was driven by the timing of IT project revenue within the year (-16% y/y) and the deliberate scaling back of third-party handset exports (-12% y/y).
▪ Mobile data revenue continues on a strong growth trajectory (+8% y/y), mobile ARPU increased across all subcategories, and the SIM base expanded by 2% y/y driven by M2M growth.
▪ Broadband revenue rose 4% y/y on the back of simultaneous subscriber base and ARPU growth, reflecting sustained demand for fiber connectivity
▪ Improving revenue mix and disciplined cost management drove gross profit up 4%, operating profit up 6%, and net income up 9% y/y.
▪ Free cash flow increased 25% y/y to HUF 36 billion; working capital deteriorated temporarily due to precautionary inventory build-up related to memory chip supply risks and unfavorable timing of SI/IT receivables.
▪ Capex AL excluding spectrum fees rose 18% y/y on higher fiber, mobile network and data center capacity expansion investments, while the 2100 MHz frequency block renewal resulted in HUF 15.1 billion of spectrum capex.
▪ Management upgraded EBITDA AL guidance (to mid-single-digit growth) and the adjusted net income target (to approximately 10% growth); revenue and FCF expectations were left unchanged.
▪ Telekom will apply a 4.4% inflation-linked tariff adjustment effective July 1, 2026, which may provide further positive ARPU impact in the second half of the year