Danubius has announced its 2006 targets to the upcoming AGM (24 April), according to business daily Napi Gazdasag: the Company expects HUF 44.1bn total revenues and pre-tax profit ex-FX losses of HUF 2.6bn. Compared to the last year results (of 2005 Total sales were HUF 42.8bn and pre-tax profit ex-FX losses were HUF 1.4bn), targets represent reasonable improvement.
We would highlight that weakening HUF to the EUR had positive effect on the company’s EBITDA in the 1Q06. Weak forint going forward this year due to Hungarian macro situation could have positive impact on the Company’s 2006 pre-tax profit of the hotels company, as its revenues are € denominated, while the majority of costs occur in HUF, thus we believe the ambitious targets could be achievable. We expect total sales of HUF 45.1bn and pre-tax profit ex-FX losses of HUF 2.4bn. We would reiterate our Bux recommendation on the stock and our fair value estimate of HUF 6,370 per share.