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Egis projects 7-8% HUF revenue growth in new business year

Hungarian drug maker Egis, majority owned by France's Servier, expects revenue growth — calculated in forints at September exchange rates — of 7-8% in its business year started October 1, deputy-CEO Lászlo Marosffy said on Wednesday, a day after the company reported Q4 earnings.

Consolidated sales revenue rose 2% to HUF 118.9 billion in the 2009/2010 business year.

Egis expects domestic sales to climb 5% in the 2010/2011 business year, exceeding the 4% increase in the previous business year, Marosffy said.

Turnover in Russia and the CIS, calculated in dollars, is seen rising 8-10%, he added. In the 2009/2010 business year, sales in Russia rose 12% and turnover in Ukraine and the CIS was up 25%.

Egis projects sales growth in Eastern Europe will be about 8%, calculated in euros, about the same as the increase in the 2009/2010 business year. Growth is expected to be the highest in Turkey.

Egis sees sales on Western markets inching up 1-2%, after dropping 35% in the 2009/2010 business year. Exports of active ingredients are expected to grow 15% after dropping 25% in the 2009/2010 business year.

Prices rises do not have any role in the projected growth, Marosffy said. Growth will come rather from increased sales volume and changes to the portfolio, he added.

Egis has no acquisition plans, but it is open to all possibilities, he said. Egis has no need for production in Russia — the company's biggest export market — and its is better that it does not manufacture there considering the chance popular products could be counterfeited, he added.

Hungary's drug market was worth HUF 570 billion during Egis's 2009/2010 business year and the company's market share reached 5.3%.

Egis wants to introduce about 30 new products within the framework of a three-year programme. In the programme's first year, which ended with Egis's 2009/2010 business year, the company introduced seven new products in Hungary and nine on export markets.

Egis's headcount climbed 3pc to 3,824 in the 2009/2010 business year. Staff numbers included 2,597 people in Hungary.

Marosffy said the company plans neither layoffs nor significant new hires in the long term.

Egis's capital expenditures came to HUF 14.5 billion in the 2009/2010 business year, including HUF 13.1 billion at the parent company. CAPEX at the parent company was down 3%, but it rose 146% at Egis's subsidiaries.(MTI-ECONEWS)