Financial loss constrains Richter Q3 profit growth

Pharma

Hungarian pharmaceutical company Gedeon Richterʼs third-quarter net income edged up 2% year-on-year to HUF 22.6 billion, well under revenue growth as a financial loss weighed, Hungarian news agency MTI reports, citing an earnings report released before the opening bell on Friday.

Revenue climbed 8% to HUF 137.7 bln, supported by the success of Richterʼs anti-psychotic cariprazine. Direct cost of sales rose just 3% to HUF 59.4 bln, lifting gross profit 12% to HUF 78.3 bln.

Operating profit jumped 69% to HUF 30 bln, helped by a decline in sales and marketing costs, but the bottom line was hit by a HUF 4.5 bln financial loss, compared to a HUF 8.5 bln financial gain in the base period.

Improved margins lift Q1-Q3 profit

For the period Q1-Q3, Richterʼs net income rose 35% to HUF 83.1 bln.

Revenue climbed 13% to HUF 416.4 bln, outpacing the increase in direct costs of sales which rose 9% to HUF 175.6 bln.

Gross profit increased 16% to HUF 240.8 bln and operating profit jumped 58% to HUF 82.3 bln as sales and marketing expenses fell.

Richter noted that limitations on contact between sales reps and physicians due to the pandemic still impact promotional activities negatively.

A geographical breakdown of sales shows the United States was Richterʼs biggest market in Q1-Q3, bumping Russia out of the top spot. Turnover in the US climbed 64% to HUF 80.5 bln, lifted by sales of cariprazine, marketed there under the brand name Vraylar.

Sales in Russia edged up 1% to HUF 63.6 bln.

Domestic sales increased 3% to HUF 29.8 bln.

Oral contraceptives remained Richterʼs biggest seller in Q1-Q3, as sales rose 18% to HUF 83.5 bln. Cariprazine was runner-up as turnover jumped 73% to HUF 67.2 bln.

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