Richter Earnings Climb 11% in 2022


Net income of Hungarian pharmaceutical company Gedeon Richter rose 11% to HUF 155.6 billion last year, boosted by higher revenue and improved margins, an earnings report published ahead of the opening bell on Tuesday shows, according to a report by state news wire MTI.

Revenue climbed 27% to HUF 802.8 bln, outpacing the increase in direct cost of sales which rose 22% to HUF 342.3 bln. Gross profit was up 32% at HUF 460.5 bln.

Operating profit rose a more moderate 13% to HUF 153.6 bln as a HUF 27.9 bln windfall profit tax weighed.

R&D spending increased 23% to HUF 75.1 bln.

Earnings per share came to HUF 835 for the year.

CEO Gabor Orbán said 2022 was an "exceptionally successful year" with "very healthy growth in underlying revenues and gross profits throughout the year", while acknowledging that an exchange rate "tailwind" up to September turned into a "headwind" in Q4, and cost inflation gradually fed through into operating costs.

"A long list of new product launches, new partnerships, licensing deals, and R&D milestones executed in 2022 lay the foundations for our future success and resilience. These results were achieved despite having to navigate an environment unsettled by macro volatility, supply chain disruption, and geopolitical turmoil," he added.

Vraylar Sales Drive U.S. Turnover

The United States remained Richter's biggest market, with turnover there climbing 32% to HUF 162.1 bln, supported by royalty revenue from the antipsychotic cariprazine, marketed there under the brand name Vraylar, which came to HUF 138.1 bln.

Russia, where sales jumped 52% to HUF 129.1 bln, was runner-up.

"Notwithstanding a volatile market environment presenting unforeseeable risks connected to the ongoing war and the subsequent sanctions imposed on Russia, business operations prevailed broadly at levels experienced prior to the pandemic," Richter said.

Domestic sales rose 5% to HUF 45.7 bln. Richter noted that its market share reached 4.6%, making it the fourth-biggest player in Hungary. On the retail market for prescription drugs alone, Richter was in second place with a market share of 7.4%.

Sales in China climbed 39% to HUF 21.7 bln. Richter noted its purchase of marketing company SHE Healthcare, together with its paediatric portfolio, and pointed to plans to take advantage of the company's proprietary online sales platform to promote its women's healthcare products.

Sales in Ukraine, calculated in euros, dropped 34% to EUR 26.5 million. Richter noted that a procedure implementing the suspension of 35 products it sells there was initiated in October, after legislation was amended to allow the revocation of licenses for companies that operate manufacturing units and pay taxes in Russia.

Cariprazine, also marketed under the brand Reagila, was Richter's biggest-selling product, generating sales of HUF 146.5 bln, a 38% increase over 2021. Oral contraceptives, sales of which rose 29% to HUF 132.9 bln, were runner-up. 

Richter's balance sheet shows retained earnings of HUF 966.4 bln at year-end, up 14% from 12 months earlier.

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