Richter’s Q4 profit up as a result of lower R&D costs, financial losses

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Hungarian pharmaceutical company Richter Gedeon reported consolidated net income of HUF 9.7 bln in the fourth quarter, up from a loss of HUF 3.9 bln in the base period following a drop in R&D costs, and reduced financial losses, the company announced this morning in an earnings report.

Richterʼs bottom line was assisted by a 47% drop in R&D spending, to HUF 5.9 bln, and a 79% decline in financial losses, to HUF 3.3 bln, Hungarian news agency MTI reported.

Earnings per share amounted to HUF 51 in the reported period.

Revenue dropped 2% to HUF 88.7 bln, while direct cost of sales rose 6% to HUF 37.1 bln, causing gross profit to fall almost 7% to HUF 51.5 bln. Lower R&D costs and financial losses, however, paired with stable spending on sales and marketing as well as administration, lifted operating profit 34% to HUF 15 bln, according to the news agency.

Richterʼs net income for the full year jumped 117% to HUF 54.1 bln as costs fell. Revenue, direct cost of sales and gross profit all rose around 3%, with revenue reaching HUF 365.2 bln, cost of sales HUF 143.8 bln and gross profit HUF 221.4 bln. But sales and marketing expenses fell 4% to HUF 97.2 bln, R&D costs dropped 20% to HUF 34.8 bln and other income and expenses plunged 86% to HUF 1.6 bln, raising operating profit by 79% to HUF 67.4 bln, MTI added.

On the “other income and expenses” line, Richter booked a “substantial” one-off milestone payment related to the approval by the United States Food and Drug Administration of an antipsychotic developed by the company. Richter booked the payment for its trademarked drug Vraylar, with the active ingredient cariprazine, in Q3.

Richterʼs financial loss narrowed by 35% to HUF 8.3 bln, and HUF 6.6 bln of that amount was unrealized.

In a breakdown of sales by region, Richter said domestic turnover rose 7% to HUF 35 bln and sales in other European Union member states increased by 11% to HUF 149.6 bln, MTI reported. Sales in the CIS fell 10% to HUF 122.1 bln as a 51% decline in Ukraine weighed. U.S. sales were up 12% at HUF 18 bln, sales in Latin America rose 9% to HUF 9.1 bln and sales in China increased 24% to HUF 16.8 bln.

Richter had total assets of HUF 748 bln at the end of last year, up 4% from twelve months earlier, according to the companyʼs balance sheet. Net assets rose 10% to HUF 619.8 bln. Non-current liabilities were down 13% at just HUF 57.1 bln, according to MTI.

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