Richter financial loss weighs on earnings

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Image by Richter.hu

Hungarian drugmaker Gedeon Richterʼs first-quarter net income fell 30% year-on-year to HUF 14.5 billion, dragged down by financial losses even as margins improved, an earnings report published early Tuesday shows.

Revenue edged up 1% to HUF 113.9 bln during the period. Cost of sales fell 2% to HUF 48.4 bln, lifting gross profit by 4% to HUF 65.6 bln. Operating profit was up 6% at HUF 17.7 bln, national news agency MTI reported.

Richter booked a HUF 2.4 bln net financial loss, compared to a HUF 4.4 bln gain in the base period. The company noted that HUF 2.2 bln of the loss was unrealised. Earnings per share came to HUF 78. Richter spent HUF 11.3 bln on research and development, up 11%. Capital expenditures fell by one-third to HUF 5.3 bln.

In a breakdown of revenue by region, Richter said sales in Hungary were practically flat at HUF 10.8 bln, but sales in other European Union member states rose 8% to HUF 50.7 bln. Sales in the CIS were down 12% at HUF 33 bln and sales in the United States rose 5% to HUF 6.7 bln. Sales in China jumped 32% to HUF 6.2 bln.

Sales of Richterʼs uterine fibroid drug Esmya, which has come under scrutiny by the European Medicines Agency (EMA), were down 22% at HUF 5 bln. Early in February, the EMAʼs Pharmacovigilance Risk Assessment Committee (PRAC) recommended temporarily restricting prescriptions of Esmya until a review of potentially related liver injury is completed.

"Richter is determined to work with PRAC and provide the necessary information to allow them to complete a fair assessment in a timely manner," the company said in the earnings report. "Richter continues to believe that all the available data for Esmya support a favourable benefit-risk profile and is committed to providing this unique treatment option to women suffering from uterine fibroids," it added. The PRAC review is expected to be completed before the end of May 2018.

Richter had total assets of HUF 776.5 bln at the end of March, up 2% from the end of December, the balance sheet shows. Retained earnings increased 3% to HUF 618.5 bln.

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