Magyar Telekom cuts profit guidance on Hungary windfall tax plan
05/06/2022 18:55
BUDAPEST, June 5 (Reuters) - Magyar Telekom MTEL.BU said
on Sunday it would report a fall in core profit in 2022 compared
with last year's levels after the Hungarian government imposed
windfall taxes on some businesses to rein in the budget deficit.
The company now expects earnings before interest, taxes,
depreciation, and amortisation and to show a "moderate decline"
this year compared with 3% to 5% growth projected previously.
Magyar Telekom said the new tax, which Prime Minister Viktor
Orban's government plans to keep in place for two years, would
cost it about 25 billion forints ($68.41 million) this year.
Orban's government announced windfall taxes worth 800
billion forints ($2.19 billion) on "extra profits" earned by
banks, energy companies and other firms last month, hitting
Budapest stocks and rattling investors.
The measures are needed to rein in the budget deficit partly
due to costly tax rebates and other measures that helped Orban
to get re-elected in April.
Shares in Magyar Telekom, a unit of Deutsche Telekom
DTEGn.DE , have lost some 8% of their value since the windfall
taxes were announced, trading at their lowest since the
beginning of last year.
Other parts of the company's 2022 guidance remained
unchanged.
($1 = 365.43 forints)
(Reporting by Gergely Szakacs. Editing by Jane Merriman)
((gergely.szakacs@thomsonreuters.com ; https://twitter.com/szakacsg
; +36 1 882 3606 ; https://reut.rs/3pHWT1v))