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Egis foresees 7-8% increase in revenues in 2010/2011 financial year

Pharmaceutical producer Egis expects a 7-8% increase in sales revenues in its business year starting on October 1, CFO Csaba Poroszlai announced on Thursday.  

Domestic sales are expected to rise 5% in the current financial year, while revenues will grow 10-12%% in Russia and other CIS market and 8% in Eastern Europe both in euro terms. In other regions, sales of finished products will be up 10%. The company foresees a 30% increase in active ingredients. 

The proportion of USD revenues will significantly drop to only 15% as of March 2011, as exports to Russia will be disclosed in euros due to changes in the Russian regulations. Egis' exports to Russia are invoiced in rubles instead of USD as of January 1, 2011, Poroszlai explained.

Egis' strategy to introduce 8-10 new products per year remained unchanged, Poroszlai said. This inevitably raises expenditures, but this will hopefully be offset by increasing sales. 
The regulatory environment remained negative as drug producers kept covering considerable part of drug subsidies, Poroszlai said. Egis has been forced to decrease prices on a quarterly basis. The National Health Insurance Fund has made quarterly adjustment of subsidies to the falling prices and manufacturers, including Egis, had to follow the declining trend in prices if they intended to ensure continued reimbursement.

On the upside, current regulations enable medicine producers to recover 20% of their 2009 extra payments in 2010 and even 100% of their 2010 payments in 2011 for the benefit of R&D activities. However, in line with a new amendment passed by the Parliament in December 2010, recoveries will not debit the National Health Insurance Fund any more.
We have not found a suitable acquisition target yet, but we are aware of the possibilities enabled by our balance sheet structure, said Poroszlai. The Egis group currently consists of nine subsidiaries in the countries of the CEE region. (GL)