Hungary Trends – The week in business and finance in Hungary

Budapest (MTI) – See below MTI’s main business and financial news from the previous week:

HIGHER REVENUE, LOWER RISK AND TAX COSTS LIFT OTP Q1 PROFIT 54 PC

OTP Bank‘s first-quarter consolidated after-tax profit rose by an annual 54 percent to 52.9 billion forints (EUR 170m), lifted by higher revenue, lower risk costs and a cut in the corporate tax rate, an earnings report showed. In spite of the low interest rate environment, OTP’s net interest income edged up by 2 percent to 132.2 billion forints. Net revenue from commissions and fees increased by 15 percent to 44.5 billion forints. Risk costs dropped by 40 percent to 12.5 billion forints, and a reduction in the corporate tax rate from 19 percent to 9 percent from the start of the year cut OTP’s corporate taxes by 42 percent to 9.4 billion forints.

RICHTER Q1 PROFIT CLIMBS 71 PC ON HIGHER REVENUE, FINANCIAL INCOME

Hungarian drugmaker Gedeon Richter’s first-quarter net income rose by an annual 71 percent to 19.8 billion forints, lifted by higher revenue, financial income and a tax refund, an earnings report showed. Revenue increased by 26 percent to 112.7 billion forints. Direct cost of sales rose at a faster rate, climbing by 41 percent to 50.6 billion forints, but sales and marketing costs, administration expenses and spending on R+D increased at a more moderate pace.

MTEL Q1 PROFIT DROPS ALMOST 55 PC ON NARROWER MARGINS, ONE-OFFS

Magyar Telekom’s first-quarter after-tax profit fell by 54.6 percent year-on-year to 4.8 billion forints on narrower margins, and one-offs in the base period, an earnings report showed. The consolidated profit and loss statement, which excludes Crnogorski Telekom, MTel’s Montenegrin unit sold to Hrvatski Telekom in January, showed revenue rose by 1.6 percent to 140.5 billion forints. Direct cost of sales outpaced that increase, climbing 6.5 percent to 52.9 billion forints, and gross profit dropped by 1.2 percent to 87.6 billion forints.

BILL WOULD RESTRICT INFOCOMMUNICATIONS COMPANIES’ USE OF “LOYALTY CONTRACTS”

MPs of governing Fidesz submitted a bill to parliament that would limit the terms of “loyalty contracts” infocommunications companies offer to one year and allow subscribers who have such contracts to cancel them, without penalty, if the service provider unilaterally changes the contract to the disadvantage of the subscriber.

SCHAEFFLER STARTS EUR 80 M EXPANSION IN HUNGARY

The Hungarian ball bearing unit of Germany’s Schaeffler laid the cornerstone of an 80 million euro plant at its base in Debrecen (E Hungary). The unit, FAG Magyarország, is getting a 4.5 billion forint government grant for the investment which will create 500 jobs.