Slimmer margin, weaker ruble weigh on Richter earnings
Image by gedeonrichter.com
Hungarian drugmaker Gedeon Richterʼs first-quarter net income slipped 19% year-on-year to HUF 12.2 billion on a narrower margin and exchange rate changes, an earnings report published early today shows, according to Hungarian news agency MTI.
Earnings were slightly over the HUF 11.7 bln estimate of analysts polled by portfolio.hu.
Revenue was up 2% at HUF 89.3 bln, but cost of sales climbed at a faster pace, rising 11% to HUF 35.7 bln, driving gross margin down about 4% to HUF 53.6 bln.
Richter attributed the drop to lower sales in Western Europe and the United States, a decline in turnover of womenʼs healthcare products, the weaker ruble and an increase in sales of its lower-margin wholesale and retail businesses. Higher sales in Poland, Russia and China could only partly offset these negative factors, it added.
Earnings per share came to HUF 66 for the period.
Richterʼs operating profit rose 7% to HUF 14.8 bln, lifted by HUF 2 bln in “other income other expenses”. The amount included HUF 3.5 bln recorded in connection with the 100% acquisition of the joint venture Gedeon Richter Rxmidas, which sells OTC products in China.
R&D costs were also lower, falling 9% to HUF 9.9 bln.
CAPEX was up 17% at HUF 3.9 bln.
Richter booked a net financial loss of HUF HUF 400 million in Q1, compared to a gain of HUF 2.3 bln in the base period.
In a breakdown of sales by region, Richter said turnover in Hungary edged up about 1% to HUF 10.8 bln and sales in the rest of the EU rose 7% to HUF 37.8 bln. CIS sales increased 3% to HUF 27.8 bln, U.S. sales plunged 51% to HUF 2.2 bln and sales in China jumped 20% to HUF 4.4 bln.
Richter had total assets of HUF 756.6 bln on March 31, down 1% from the end of 2015. Net assets were up 2% at HUF 633.3 bln and included HUF 575.2 bln in retained earnings. Richterʼs non-current liabilities stood at HUF 56.8 bln at the end of Q1.
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