Duna House - Strong Results, But Macro Headwinds May Gather

• Duna House Group posted very nice Q1 profit, which increased by 60% to HUF 264 million (EPS 73) helped mainly by the consolidation of the recently acquired entity in Poland, and an FX revaluation of ca. HUF 45 million. Excluding the latter, profit would have been up by ca. 30% y-o-y. In Q1, more than half of the consolidated revenue is arriving from Poland.
• COVID – 19: Mgmt withdrew its FY guidance (HUF 1.25 billion; EPS 360), in line with other companies. Also they indicated that transaction numbers have been recovering, in the end of May figures stood at w20 -40% y-o-y, with the lowest point in the middle of April (w15) -70% y-o-y. Fixed cost such as employee expenses was reduced for March and April which has gradually been relaxing and by August wages should return to the normal level. Obviously, Q2 results will be under pressure.
• More than 70% and 81% of the flats for Forest Hill and MyCity projects have been sold, so one may assume that this year we should see a part of the profit to realize this year. For all the three projects we expect ca. HUF 810 per share profit.