Freddy Robinson's losing money in Romania, so far
Milomor Trade warns of second-quarter losses as TV, cellphone ventures post losses
Since the end of April, Milomor Trade & Communications (TASE: MLTR), which markets and services cellphones in Romania, and also invests in a Romanian satellite television company, have lost 27%. From the start of the year, Milomor shares have lost 13%.
Perhaps the reason for the negative sentiment is that Milomor Trade & Communications, which belongs to Freddy Robinson's company Miloumor (TASE: MILO), is not doing well. The company just released an earnings warning for the second quarter of 2006, saying it expects to post a substantial loss.
In the first quarter it had lost NIS 1.5 million, and in the parallel quarter of 2005, it had netted NIS 4.5 million - on a pro forma bases (not including one-time charges).
In short, Milomor expects to lose more than NIS 1.5 million in the second quarter, for two reasons. One is a steep drop in the value of inventory of Samsung cellphones held by its Romanian cellphone marketing subsidiary HAT: 2 million euros down the drain there. The second reason is an affiliated company called DTH, in which Milomor owns a 40% interest, which is losing money hand over fist.
DTH is involved in establishing a multi-channel television broadcasting company in Romania. Milomor estimates that its share of DTH's second-quarter loss will be 1.2 million euros, versus 300,000 euros in the first quarter. operating and marketing costs are climbing, but meanwhile DTH can't report revenue from subscribers, the company explained.
Milomor Trade & Communications is worth NIS 96 million on the Tel Aviv Stock Exchange.
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