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Egis reports 50% pre-tax growth

Egis Nyrt achieved Ft 22,497 million net sales and Ft 2,809 million pretax profit in Q4 of the 2005/2006 financial year, according to its non-audited balance sheet posted on the Budapest Stock Exchange (BÉT) website today. Turnover was up 17% and pretax profit exceeded the achievement in the same period of 2004/2005 by 14%.

International sales continued to be the driving factor in the company’s good performance. Domestic sales, supported by the demand brought over from the preceding period, expanded by 12% in Q4. At the same time, sales outside Hungary rose by 20% in forint and 12% in US dollar terms. Within this, it is to be highlighted that over this quarter sales grew by 26% in Russia and in other CIS markets while there was a 10% expansion in Eastern European turnover.

Gross margin in Q4 represented 63% which can be considered as a good performance for a closing quarter. Rise in general operating costs still lagged significantly behind the growth of sales. The balance of other income and expenditures featured, similarly to fourth quarters of previous years, relatively high surplus on the expense side. As a result of all these factors, the company’s operating profit accounted for Ft 2,433 million in Q4 surpassing last year’s figure by 21%. The company generated Ft 376 million profit from financial activities, which, due to much lower forex gain in Q4, remained behind the Q4 2004/2005 value. Egis’s had a pretax profit of Ft 2,809 million in the Q4, reflecting a 14% increase on past year’s level. With the Q4, Egis has closed a very successful business year.

In 2005/2006, the company’s achievement, continuing dynamic rise in turnover and profit featuring the preceding two years, showed the most intensive development ever experienced previously. This was attributable primarily to the substantial improvement of structure and value of sales outside Hungary. Annual sales revenue totaled Ft 87,361 million, 20% more in year-on-year comparison. The company realized a 12% turnover expansion in Hungary, increase in international sales accounted for 26% in forint and 15% in US dollar terms.

The strategic international markets saw the most rapid rise in sales, namely, in US dollar terms, 32% increase in Russia, 55% in Ukraine, turnover in other CIS states moved up by 46% while in the Eastern European countries by 11%. Over 2005/2006, gross margin improved by 3 percentage points. Innovation expenses grew in proportion to turnover and regarding other costs the company exercises strict control. These key factors resulted in an annual operating profit of Ft 15,479 million with an increase of 50% on the relative value of 2004/2005. Showing also a growth of 50%, the company’s pretax profit rose to Ft 17,720 million. (