AAA Auto temporarily halt Hungary operations

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Prague-based used car seller AAA Auto’s losses grew to €28 million (about $38 million) in 2008 from €4.8 million in 2007 as revenue plunged, the company said in its consolidated report for the period published on Thursday.

AAA Auto racked up a Q4 loss of €19.9 million. Full-year revenue dropped 23% to €364.3 million. Cost of goods sold fell 25% to €293.1 million, but operating costs climbed 15% to €90.6 million.

In the Q4, revenue fell 42% to €52.1 million. Cost of goods sold dropped 45% to €39.8 million and operating costs increased 43% to €25.9 million.

Revenue from sales in Hungary fell 27% to €39.6 million in 2008. Q4 revenue dropped 63% to €6.1 million.

AAA Auto said its board decided on Wednesday to temporarily close down operations in Hungary because of the worsening economic situation and low demand.

The company does not intend to delist its shares from the Budapest Stock Exchange and plans to come back to the Hungarian market in two to three years when the economy recovers.

AAA Auto had total assets of €96.9 million on December 31, 2008, 38% less than twelve months earlier. The company’s net debt-to-equity ratio jumped to 814% from 220% during the period.

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