Are you sure?

Egis posts better-than-expected profit of HUF 4.12 billion in Q1 of business year

Hungarian drug company Egis recorded net profit of HUF 4.12 billion (€15.18m) in the last quarter of 2009 - the first of its business year -, down 15% yr/yr, the company announced in its consolidated IFRS report for the period on Wednesday evening.

The company's Q1 profits are well above analysts' consensus of just above HUF 3 billion.

Egis noted that advance export deliveries it made to Poland in the last quarter of 2008 added as a one-off effect HUF 1.32 billion to revenue and HUF 813 million to operating and pre-tax profit. The same effect will lower the base for Q1 2010.

Egis generated consolidated revenue of HUF 27.4 billion in the last three months of 2009, down 5.8% yr/yr, but down just 1% if adjusted for the one-off effect in the base.

Consolidated earnings per share (EPS) was HUF 530 compared to HUF 622 one year earlier.

Unconsolidated net profit fell 25.1% from one year earlier to HUF 4.16 billion, and revenues dropped 11.4% to HUF 25.5 billion.

The consolidated cost of sales was HUF 11.8 billion, down 10% yr/yr, dropping more than sales did. Gross profit was HUF 15.6 billion, down 2.3%, but the gross profit margin still rose 2.1%-points from a year earlier to 57.1%.

Consolidated operating profit, at HUF 3.6 billion in the last three months of 2009, was down 20% from the same period in 2008, and fell 2% against an adjusted base.

Net financial income was HUF 743 million in the last three months of 2009, compared to HUF 384 million during the same period in 2008.

Consolidated exports sales fell almost 10% according to unadjusted figures to HUF 19.3 billion, adding that a 8% weaker dollar cut into forint-term export revenues. Egis noted that export sales to strategic markets rose 1% (adjusted 7%) in forint terms.

In USD-terms, export revenue was $105.4 million, down 2%.The value of exports to Russia, the company’s biggest export market was $33.1 million, up 11%. The value of exports to Ukraine rose nearly two and a half times to $6.5 million, while that of exports to other CIS countries rose 7% to $7.3 million.

The dollar value of exports to central and eastern European countries was $44.7 million, down 2%, though that of exports to Poland rose 14%.

Finished-product exports to Western markets dropped 29% to $6 million after last year's sharp rise.

Sales of active ingredients dropped 45% to $7.8 million in line with reduced production of active ingredients for parent company Servier.

Domestic sales rose 4.6% yr/yr to HUF 8 billion, giving Egis a market share of 5.3%, fifth among drug suppliers in Hungary, the company said.

Egis noted as positive a regulation going into effect enabling Hungary’s drug companies to reclaim this year up to 20% of the 12% extra tax payments and 20% of payments on medical representatives they made in 2009 up to the tune of their R&D expenses. The reclaimable ratio will rise to 100% in 2010. (MTI-Econews)