Mr László Marossfy, CFO of Egis told to Napi Gazdaság that the majority of the company's hedge deals have expired as they did not renew them at the 190 USD/HUF level. Now HUF trades at a 12M high to USD at 184.85.
Our view: We see the news negatively, as we see the stronger forint will put pressure on Egis’ earnings in 1Q07, while hedge gains won’t offset this volatility in earnings. We estimate that the lack of hedge deals for a half calendar quarter could lower our Egis 2007 EPS forecast by 0.6% from HUF 1,734 to HUF 1,724, assuming that Egis has an annual US$110m net exposure.