ECONOMY

HDFS beats H1 expectations

Retailer Hellenic Duty Free Shops (HDFS) yesterday beat market expectations with first-half net profit that rose 18.6 percent as a strong wholesale business and lower costs offset weak petrol sales. HDFS, with exclusive rights to run duty-free and other retail stores at airports, ports and border crossings in Greece until 2048, said net profits rose to 18.4 million euros ($23.60 million) versus a median forecast of 16.35 million euros by eight analysts in a Reuters poll. «In the first half of 2006, the management’s cost containment efforts on an operational level continued successfully, resulting in a further decrease in operating and administration expenses,» the company said in a statement. HDFS has stopped selling tax-free fuel to departing non-EU drivers at two Greek border crossings since the government revoked its permit in April, citing fuel-smuggling risks. The company has gone to court over the issue, and is awaiting a decision. Sales rose 6.9 percent to 109.87 million euros on the back of strong wholesale activity. Last year, the retailer agreed with cigarette maker Philip Morris to sell tax-free cigarettes to Greek ship suppliers. HDFS is majority-owned by Greek jeweler Folli Follie, which holds a 52.28 percent stake. The shares have fallen 12 percent since the start of the year, compared with a 18 percent loss in the broader Greek market. The stock trades at 16.79 times 2006 estimated earnings, at a discount to the 19.7 multiple for specialty stores in the European Union, according to Reuters Estimates. (Reuters)