Richter revenue outlook worsens slightly

Pharma

Hungarian drugmaker Gedeon Richter expects its revenue – calculated in euros – to fall 6-7% this year, CEO Erik Bogsch said on Thursday, after the company published second-quarter earnings.

Turnover is set to decline on lower sales in Russia, Ukraine and Poland, Bogsch said. Three months earlier, he said sales would fall 6% this year.

Speaking about sanctions against Russia, Bogsch said no step had been taken so far that would have a direct negative impact on the company. He said the main problem was a drop in purchasing power in Russia and Ukraine. Richter's production unit in Russia is expected to play a big role in its business there, which is why capacity is being increased, he said. Richter expects a 5-10% decline in turnover in Russia, calculated in roubles. Three months earlier, the decline was put at 5%.

Sales in Ukraine, calculated in dollars, are set to fall 35%, Bogsch said. Polish sales are expected to decline 10-15%, bigger than earlier expected. In Western Europe, sales are seen rising 10-15%, while sales in new EU member states stagnate. Western states now account for 46% of the company's turnover in the EU, up from one-third in previous years, Bogsch noted.

Western European sales make up 13% of total turnover, up from 10% earlier, in line with Richter's strategy. The share of Russian sales in total turnover has fallen to 23% from 29%, Bogsch said. Ukraine's share has slipped to 5% from 6%, though the share in other CIS countries has risen, he added.

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