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Fotex reports nine-month loss on costs of company revamp

Fotex, a Hungarian retailer turned property manager, reported a nine-month loss because of the cost of selling units and revamping the company.

The net loss for the nine months ended September 30 was Ft 216.3 million ($1.07 million), compared with profit of Ft 126.1 million a year earlier, Budapest-based Fotex said in a statement to the stock exchange today. One-time costs amounted to Ft 223.7 million. Fotex Nyrt, Chairman and founder Gábor Várszegi, Hungary's fourth-richest man, turned to real estate after competition among retailers increased following the country's 2004 European Union accession. The company, which started as a chain of photo developers, has sold assets and unprofitable units and rented space to Subway Restaurants and Tesco Plc. Sales dropped 35% to Ft 13.35 billion after Fotex sold a chain of opticians a year earlier and closed some stores, the company said today. Fotex shares are the second-best performers in Hungary's benchmark BUX index this year, gaining 72% and giving the company a market value of Ft 42.2 billion. (Bloomberg)