Cost cuts lift Richter profit 6% in Q3

Telco

Hungarian drugmaker Richter Gedeon’s third-quarter after-tax profit climbed 5.9% to HUF 20.6bn from the same period a year earlier as spending on administrative costs and research and development was cut, the company’s consolidated IFRS report published Tuesday shows.

Profit was over the HUF 17.5bn estimate by analysts polled by portfolio.hu.

Earnings per share came to HUF 1,108, up from HUF 1,042 in the base period.

Third-quarter revenue fell 7.8% to HUF 73.4bn. Cost of sales declined at a slower rate, dropping 5.5% to HUF 25.5bn, causing gross margin to drop by 9.0% to HUF 46.8bn.

In spite of the declines, Richter’s operating profit was up 6.1% at HUF 25.5bn as the company slashed administrative and other operating costs by 30.2% to HUF 3.5bn and R+D spending was reduced by 8.0% to HUF 6.9bn.

In Q1-Q3, a big increase in administrative and other operating cost - mainly related to sales and marketing activities, Richter noted in the report - took a bite out of the bottom line.

After-tax profit fell 30.0% to HUF 40.4bn from the same period a year earlier.

Revenue edged up 1.2% to HUF 218.3bn. At the same time, cost of sales fell 3.1% to HUF 81.0bn, lifting gross margin by 3.9% to HUF 137.3bn.

The increases were countered, however, by a 32.6% increase in administrative and other operating costs to HUF 57.9bn. Richter also booked a HUF 3.6bn financial loss in Q1-Q3 compared to financial profit of HUF 6.8bn in the base period.

Richter said its domestic sales in Q1-Q3 rose 9.3% to HUF 28.1bn from the same period a year earlier. Sales in other European Union countries were up 10.2% at HUF 78.3bn, but sales in CIS countries edged down 1.4% to HUF 85.0bn and sales in the US plunged 37.4% to HUF 13.6bn. Sales in other countries were up 21.2% at HUF 13.3bn.

Capital expenditures came to HUF 17.5bn in Q1-Q3, up 36.1% from the base period. CAPEX in Hungary reached HUF 3.2bn.

Richter had total assets of HUF 623.4bn on September 30, 2011, up 4.1% from the end of 2010. Net assets were up 4.8% at HUF 458.5bn.

ADVERTISEMENT

Reforms to raise productivity would strengthen recovery - OE... Analysis

Reforms to raise productivity would strengthen recovery - OE...

Meeting called to address Pegasus spyware lacks quorum  Parliament

Meeting called to address Pegasus spyware lacks quorum 

Skanska commercial dev unit names new EVP of operations Hung... Appointments

Skanska commercial dev unit names new EVP of operations Hung...

Zsa Zsa Gabor's ashes buried in Budapest City

Zsa Zsa Gabor's ashes buried in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.