(505 HUF, 0,00%) is confident of hitting this year's -4% growth target for underlying EBITDA (1H11 growth was 0.8%), even though economic volatility is forcing the company to delay investments. “I'm forced to delay investments as much as I can," Chief Executive Christopher Mattheisen said Thursday. "There's no indication of positive recovery in domestic demand, and our business depends very much on that," Mattheisen continued. The company's profitability may get a boost when the Hungarian government lifts its extraordinary "crisis" tax in 2013, according to Mattheisen. The CEO has not heard of any communication to the contrary and what MTEL has seen and plans indicate that the tax regime of temporary taxes is going to end after 2012.
Our view:
We take the information said during the interview as neutral. MTEL is still facing with a tough macro environment as high CHF/HUF rates and unemployment rate accompanied with increasing gasoline prices pressure household spending. We would be cautious as this point to assume that no crisis tax will exist in 2013, given the unclear outlook for Hungary’s budget in 2013 and the anticipated slowdown in 2011 and 2012.