AAA Auto - 1Q09 results in the black on continued operations

Net loss came in at € 0.9m for 1Q09, which was much above our forecast for a loss of € 7.2m. The results were better both on continued and discontinued operations. On continued operations bottom line was in the black at € 0.7m, versus a loss of € 2.3m in 1Q08 and versus our expectations for a loss of € 2.6m. Revenues and gross profit on continued operations were almost fully in line with projections. The company outpaced expectations primarily on much lower HR costs (at € 3.6m vs. forecast of € 4.5m) and very low depreciation. Below EBIT line, unexpectedly the result on financial activity was positive at € 0.8m, which needs to be explained. For discontinued operations, the results beat projections as there were no accounting one-offs in the results; all write-offs will be shown in the audited results of 2008. We would expect positive market reaction. Positive net result on continued operations in the seasonally weak 1Q makes credible management’s expectations to breakeven on full-year basis.

AAA Auto: 1Q09 results