Richter Q3 Earnings, Revenue Fall
Image by gedeonrichter.com
Third-quarter net income of Hungarian pharmaceutical company Gedeon Richter fell 34% year-on-year to HUF 54.6 billion as revenue declined, net financial income fell and a windfall profit tax weighed, MTI writes, citing an earnings report published ahead of the opening bell on Wednesday.
Revenue dropped 13% to HUF 188.5 bln.
The direct cost of sales fell 39% to HUF 53.5 bln, lifting gross profit 3% to HUF 135 bln, but operating profit fell 24% to HUF 49.4 bln as "other expenses" climbed 183% to HUF 20.5 bln.
Earnings per share came to HUF 294 for the period.
Q1-Q3 Earnings Drop 38%
For the period Q1-Q3, Richter's net income fell 38% to HUF 122.5 bln.
Revenue rose 4% to HUF 602 bln. Gross profit climbed 16% to HUF 391.3 bln on improved margins, but operating profit fell 6% to HUF 144.4 bln as other expenses jumped 177% to HUF 46.9 bln.
Richter booked HUF 22.1 bln in payments on a windfall profit tax during the period, while claw-backs came to HUF 8.8 bln. Milestone payments reached just HUF 0.6 bln, well under the HUF 8.7 bln in the base period.
Richter booked a net financial loss of HUF 18.4 bln in Q1-Q3, compared to a net financial gain of HUF 51.3 bln in the base period.
CEO Gábor Orbán said sales of Vraylar, the brand name of Richter's antipsychotic cariprazine, had benefited from a "massive increase in uptake" after the drug was cleared for adjunctive treatment of major depressive disorder.
He added that exchange rate changes had been a "huge drag" on revenue as the ruble depreciated and the company had no hedging tools available.
"Underlying profitability has been supported by a combination of strong volume growth, gains from efficiency programs, and positive composition effects, particularly the contribution of Vraylar. Our key objective remains to broaden and deepen patients' access to our products, the key near-term focus being on women suffering from endometriosis," he said.
The United States was Richter's biggest market in Q1-Q3: pharmaceutical sales there climbed 31% to HUF 153.6 bln, lifted by HUF 136.1 bln of Vraylar royalties.
Pharmaceutical sales in Russia edged down 2% to HUF 88.1 bln. Richter noted that capital restrictions in Russia did not allow it to conclude hedging contracts for the ruble, impacting financial results, and flagged short-term volatility of financial income in the future.
Pharmaceutical sales in Hungary rose 15% to HUF 38.5 bln.
Richter noted that a procedure implementing the suspension of a number of products it sells in Ukraine was initiated in October 2022, after legislation was amended to allow the revocation of licenses for companies that operate manufacturing units and pay taxes in Russia. The practical implementation of the measure did not take place by the end of Q3 and sales of Richter's registered products have continued without impediment, so far, the company added.
Cariprazine, also marketed under the brand name Reagila, was Richter's top-selling product in Q1-Q3: sales increased 39% to HUF 144.6 bln. Oral contraceptives were the runner-up, with sales climbing 8pc to HUF 106.8 bln.
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