By Margit Feher
BUDAPEST--Hungarian telecommunications company Magyar Telekom
Nyrt. (MTELEKOM.BU) can't commit to resume paying a dividend on
this year's earnings as it needs cash to bid for various mobile
frequencies the Hungarian government is selling, the company's
chief financial officer said Thursday.
"It would be too early to talk about a dividend and what size it
may take if there is to be one," CFO Janos Szabo said at a press
conference. Also, the company's cashflow "wasn't strong" in the
first half of this year, he added. Magyar plans to improve its
cashflow from 2015 onward. The company announced in July a plan to
lay off 1,700 employees by 2016 as part of its cost-cutting
efforts, keeping in mind shareholders' expectations for
dividends.
The company didn't pay a dividend on 2013, which was the first
time in its history that it hadn't paid a dividend.
Earlier in the day when it released second-quarter results,
Magyar Telekom revised its 2014 forecast for earnings before
interest, tax, depreciation and amortization, or ebitda, for this
year, saying it will fall by no more than 3% on 2013, versus its
earlier forecast for an up to a 6% decline.
The company's second-quarter net profit of 11.58 billion forints
($49.4 million) beat analysts' expectations for HUF10.7
billion.
Deutsche Telekom AG (DTE.XE) holds a 59.3% stake in Magyar
Telekom.
Write to Margit Feher at margit.feher@wsj.com
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