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Egis Q3 profit doubles on financial gains

Hungarian drug maker Egis, majority-owned by France's Servier, had net profit of HUF 5.14 billion in the third quarter of its business year started October 1, more than double the HUF 2.4 billion in the same period a year earlier thanks to financial gains, the company's consolidated report for the period published late Wednesday shows.

The profit figure was just a fraction over the HUF 5.06 billion estimate in a poll of analysts by portfolio.hu.

Egis's revenue rose 2.9% to HUF 30.38 billion during the period, outpacing a 1.1% increase in cost of sales to HUF 12.94 billion to lift gross profit by 4.3% to HUF 17.44 billion. But administration and distribution costs climbed 12.1% to HUF 13.12 billion, causing operating profit to fall by 9.0% to HUF 3.8 billion. Egis blamed the increase in costs on the introduction of new products.

Egis's domestic sales rose 7.1% to HUF 8.55 billion. The company's share of the Hungarian drug market was 5.3% in Q3, according to data from International Medical Statistics.

Export sales inched up 1.4% to HUF 21.83 billion.

Egis's bottom line was helped by a net financial gain of HUF 1.49 billion in Q3, compared to a HUF 1.68 billion loss in the same period a year earlier.

Earnings per share came to HUF 660 in Q3, up from HUF 308 in the same a quarter in 2009.

In Q1-Q3, Egis's net profit rose 5.8% to HUF 14.0 billion, also helped by financial gains.

Revenue for the period dropped 3.7% to HUF 86.49 billion, but costs of sales fell at a slightly faster pace, slipping 4.8% to HUF 37.85 billion to bring gross profit down 2.2% to HUF 48.64 billion. Administrative and distribution costs rose 3.5%, causing operating profit to fall 12.2% to HUF 11.38 billion.

Egis booked a HUF 3.11 billion net financial gain during the period, more than four-fold the HUF 686 million in Q1-Q3 2009.

“Adverse external conditions are to prevail in the calculations also for the current business year, but the company envisages ongoing development in the strategic fields,” the report said.

Egis had total assets of HUF 169.0 billion on June 30, 2010, up 11.6% from twelve months earlier. Net assets were up 10.8% at HUF 146.3 billion. The company's long-term loans grew 13.7% but reached just HUF 3.12 billion.

Q1-Q3 CAPEX rose 16% to HUF 7.9 billion.

Servier owns 50.9% of Egis. The only other two companies to hold more than 5% are Franklin Templeton Investment Fund and The Capital Group. (MTI – Econews)