Egis maintains 2-4% revenue growth projection for 2011/12 business year

Hungarian drugmaker Egis, majority-owned by France’s Servier, is standing by its projection for revenue growth of 2-4% in its business year started October 1, CFO Csaba Poroszlai said at a press conference on Thursday, a day after the company published its Q4 report.

Egis expects a 6-8% drop in turnover on the domestic market because of unfavorable regulatory changes, Poroszlai said. It projects a 10-12% increase in revenue in CIS countries and 3-5% growth in Eastern Europe, he added.

The projection for change in sales of finished products in the West is +/- 5%.

Turnover and profit in Egis’s business year ended September 30 was in line with expectations, in spite of the increased burden of the sectoral tax on drugmakers in Hungary, Poroszlai said. Further regulatory changes made since the 2010/11 business year closed will have a negative effect on the company in the coming quarter, he added.

Asked whether the company could make a loss at operating level this year, Poroszlai said Egis would pay HUF 4bn-5bn in sectoral taxes in the 2011/12 business year, but it would counter the effect with a short-term reduction in costs implemented earlier. Egis cut its sales staff in Hungary by 10% and aims to bring spending on sales from Hungary to other markets where the opportunities for growth are better, such as Russia, he added.

Egis’s capital expenditures will come to HUF 15bn this business year, about level with CAPEX in the previous year, he said. Most of this will go toward research and development, he added.