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Richter Q3 profit falls 50% on higher costs

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Hungarian drugmaker Gedeon Richter's third-quarter net income fell 50% to HUF 5.7 bln from the same period a year earlier on higher costs, an earnings report published Thursday shows. Net income was slightly under the HUF 6.7 bln estimate by analysts, Hungarian news agency MTI reported.

Earnings per share came to HUF 31 for the period.

Richter's revenue rose 7.5% to HUF 88.8 bln. Direct cost of sales rose at more than double that pace, climbing 16.7% to HUF 36.3 bln.

Gross profit edged up 1.9% to HUF 52.4 bln.

Sales and marketing expenses and R+D spending both rose almost 12% to HUF 27.1 bln and HUF 10.7 bln, respectively.

Operating profit dropped 40.4% to HUF 7.3 bln.

In Q1-Q3, Richter's net income fell 27.7% to HUF 28.8 bln as operating profit dropped 37.6% to HUF 26.3 bln. Richter attributed the decline to a deteriorating gross margin, a lack of milestone income, higher claw-back related liabilities and increased R+D spending. Revenue edged up 1.2% to HUF 263.7 bln.

In a breakdown of sales by region, Richter said turnover in Hungary was up 3.7% at HUF 25.8 bln in Q1-Q3. Sales in the rest of the European Union increased 6.7% to HUF 100.2 bln. Sales in the CIS were down 7.9%, with sales in Russia falling 12.5% to HUF 64.2 bln and sales in Ukraine dropping 19.3% to HUF 12.4 bln. US sales were up 17.3% at HUF 10.8 bln, sales in China rose 4.6% to HUF 10.1 bln and Latin American sales jumped 36.3% to HUF 5.9 bln.

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