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Richter gives cautious growth projection for 2010

Richter CEO Erik Bogsch issued a cautious projection for the company's 2010 sales revenue on Friday. He noted that the forecasts could be modified due to the economic and financial crisis but this will have only a limited effect on the pharmaceutical market.

Richter continues to project revenue growth between is 0% and 5% on the domestic market this year.

Bogsch said he expects to see 5% growth in euro terms on the Russian market, 20% growth in Ukraine in dollar terms and a 15% rise in the other CIS countries. In the European Union, revenues are expected to be up 5%-10% in the eastern European countries, falling 5%-15% in the 15 long-time member states in euro terms. Turnover on the US market is expected to decline 25% in dollar terms this year.

With regard to the first-quarter results, Bogsch emphasized that Richter managed to strengthen its stable position in Russia - the company's biggest market - and the CIS countries. The results, however, were negatively influenced by changes in the forint exchange rate compared with the base period.

Bogsch noted that the revenue increase in the CIS states was partly due to the low base as well as the early deliveries preceding the new price regulation introduced in April.

The decline on the US market could be expected after last year's very good results. The fall in revenues is due to the reduction in the amount collected from profit-sharing agreements as well as the decline in exports of active ingredients, Bogsch said.

Bogsch noted that exports to Poland fell 5% in zloty terms in the first quarter, which he assessed as a mediocre performance. As for the entire year, he predicted growth between 0% and 5% on the Polish market.

The Richter CEO emphasized that the company increased its revenue and market share in Romania, adding that outstanding receivables and late payments have been causing continuous problems on that market.

As for the domestic market, Bogsch remarked that Richter will be able to reclaim 100% of its R&D expenditures this year, thus results will not be burdened with the 12% special tax.

Richter had sales revenue of HUF 63.45 billion and net income of HUF 11.54 billion in the first quarter, the company said in its unaudited consolidated IFRS report published on Friday. Sales revenue grew 3.4%, while profits fell 46.5% yr/yr. The decline in results was mainly due to a considerable fall in financial profit. (MTI-ECONEWS)