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CEE Transport backs Wabererʼs after disappointing earnings

CEE Transport, the majority owner of Hungarian road haulage firm Wabererʼs, confirmed its continued support for the company after an earnings report published Friday showed "weaker profitability," Wabererʼs said in a disclosure published on the website of the Budapest Stock Exchange (BÉT) on Monday.

Wabererʼs racked up EUR 3.4 million losses in Q1-Q3 2018, including a EUR 2.7 mln loss in Q3 alone (against net income of EUR 6.2 mln in the base period), the earnings report shows, according to state news agency MTI.

Revenues were up 10% year-on-year at EUR 546 mln in Q1-Q3, but higher payroll costs cut into profits. Revenue edged up only 0.2% year-on-year to EUR 182.6m in the third quarter alone.

"CEE Transport, as the significant majority shareholder in Wabererʼs, confirms its continued support for the company," the majority owner said.

CEE Transport added that it is not planning to conduct any further market trades on the BÉT of its Wabererʼs shares until 2020; however, it "continues to reserve its ability to accept an attractive M&A offer for a substantial proportion or all of its holding."

CEE Transport, owned by private equity company Mid Europa Partners, holds just under 72% of Wabererʼs shares, the latest data posted on the bourseʼs website shows.

On Friday, Wabererʼs said its management believes the current drop in profitability is due to lower utilization, stemming from the "slower than expected repricing of the road transportation market." The company is implementing measures to adapt to the changing market environment, it added.

Ferenc Lajkó, CEO of Wabererʼs International, said that with the unfavorable market dynamics he expects group recurring EBITDA to be 15-20% lower in 2018 than in 2017.