"Despite the negative impacts of the global financial crisis, Hungary's largest telecommunications group Magyar Telekom sees no reason to amend its dividend policy, Chairman-CEO Christopher Mattheisen told Portfolio.hu's Stock Exchange Conference on Wednesday.The financial crisis is a threat for Magyar Telekom primarily via economic recession, but at the same time it also creates opportunities, Mattheisen said.
Hungary's GDP is to contract by 1.0%, according to the government's latest forecast (vs. 1.2% growth projected previously), while there are much more pessimistic estimates on the market (on a 2-5% decline).
The telecom group is to be affected via a persistently weaker forint, higher interest rates and economic recession, the Chairman-CEO said. This will entail higher purchasing and higher financing costs, but the key worry is the state of the economy.
MTel expects lower domestic demand and more non-paying clients as a result of a 4-5% decline in spendable income. Outsourcing at corporate clients could also pick up, given they will also have a smaller investment budget, Mattheisen added.
At the same time, the crisis could make acquisitions easier for MTel, not only in the telecommunications segment but also on the cable television market.
Mattheisen said the company remained committed to efficiency improvement.
MTel embarked on a massive headcount reduction programme in end-June 2007 and by the end of this year it will have sacked 16% of its payroll, and further efficiency improvement is expected in this area, also at outsourced units, Mattheisen said.
Despite the negative implications of the financial crisis, MTel does not see a reason to overhaul its dividend strategy, he added."
Source: Portfolio Online Financial Journal
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27.11.2008