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Hungary’s Egis eyes takeovers, sees export boost

  Hungarian drug maker Egis said it is in the market for an acquisition in central and eastern Europe and sees an increase in exports during its next fiscal year.


“We have the cash and we are openly examining every (acquisition) opportunity,” Egis Chief Financial Officer László Marosffy told a news conference at a presentation of its fiscal Q4 results on Tuesday. “Our aim is to find a factory in the region where Egis operates,” Marosffy said. “If it happens to be a country outside the European Union it has the small benefit that patent laws are different ... but this is only one aspect.”

On Monday, the company reported a 137% rise in unconsolidated Q4 net income to HUF 5.88 billion ($28.9 million), beating market expectations, on the back of exchange rate gains and the sale of a Polish unit. Marosffy said the company expected sales in its domestic market, where price cuts curbed income by an annual 4% in the fiscal Q4, to rise by 3% in the next fiscal year which began on Oct. 1. He said the company planned to launch five new drugs in Hungary in that period, including three own products and two licensed drugs.

In Russia, Egis expects sales to rise by about 10% in dollar terms, which Marosffy said was a “moderately optimistic” estimate. In Poland, the company’s biggest market in central and eastern Europe, Egis forecast 20% revenue growth. However, Marosffy said Egis, majority owned by France’s Servier, was not likely to change its existing dividend policy.

“I have not heard any opinion from the owner that would have proposed a dividend that is materially different from that (paid) so far,” Marosffy said. “I think it is most likely that the HUF 120 per share dividend will remain in place.” Marosffy was also upbeat on production costs, which dropped by 6% to HUF 9.52 billion in the fiscal Q4, down by 4.7 percentage points as a proportion of sales to 39.2% year on year.

“Costs relative to production have declined and hopefully will decline further next year,” Marosffy said. At 1120 GMT, Egis shares traded down 2.4% at HUF 11,400 on the Budapest Stock Exchange, outperforming a 4.8% fall in the wider market. (Reuters)