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Fotex posts full-year loss after selling assets, closing stores

Fotex Nyrt, a Hungarian retail group, had a loss in 2006 as the company continued to shift its focus from retail to property management, causing revenue to decline.

„Everyone was waiting for the company to announce the value of its assets,” said Balázs Szegner, an asset manager at Equilor Investment Ltd. in Budapest, in a phone interview. „It looks like the number is good.” The company's net assets were worth Ft 33.1 billion at the end of last year. That included 17 billion forint invested in material assets. Fotex Chairman Gábor Várszegi, Hungary's fourth-richest man, turned his attention from retail to real estate after competition increased following the country's 2004 European Union accession, curbing earnings. Fotex, which has been selling assets and unprofitable units, is now renting space to clients including Subway Restaurants and Tesco Plc. The shares, the second-best performers in the benchmark BUX Index this year, rose 15% to Ft 785 as of 10:23 a.m. in Budapest. They have gained 14% this year, after rising 96% last year, valuing the company at Ft 55.5 billion ($287 million). The BUX has fallen 3.6% this year. Fotex reported a full-year loss of Ft 808.4 million today, compared with a profit of Ft 7.5 billion in 2005. Revenue fell 42% to Ft 18 billion. „Fotex has been moving into a more profitable industry with a smaller risk base,” Várszegi said in the statement. „We put priority on transforming our subsidiaries into pure real-estate management assets.” (Bloomberg)