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Richter net income drops 46% in Q1

Hungarian pharmaceuticals company Richter Gedeon had consolidated net income of HUF 11.54 billion in the first quarter of 2010, down 46.5% from a year earlier, the company's unaudited consolidated IFRS report published on Friday shows. The company blamed the fall on sharply stronger forint which caused financial profit to plunge 90% but also weighed on operating profit.

The profit was slightly lower than the HUF 12 billion consensus of analysts polled by the website

Sales rose 3.4% to HUF 61.29 billion in Q1. In euro terms, sales rose 14.4% to €236.4 million in Q1, including exports of €203.9 million, rising 14.6%.

Diluted earning per share was HUF 619 as against HUF 1,157 a year earlier.

Unconsolidated sales rose 5.1% to HUF 48.22 billion and unconsolidated profit for the period fell 60.9% to HUF 10.43 billion.

Group sales in Hungary totalled HUF 8.72 billion in the first quarter, up 2.1%, making Richter the fourth biggest player on the market with a share of 5.7%.

Sales to CIS countries rose 51.2% in euro terms to €90.1 million, of which sales to Russia rose 55.5% to €63.3 million. The rapid rise in Russian sales reflected both a low base and advance shipments to wholesalers in anticipation of the price regulation implemented from April this year, the report said.

Exports to other EU countries in the region rose 6.0% in euro terms to €90 million.

Sales in the USA dropped a sharp 43.1% in USD terms (a 51.6% drop in euro terms to €3.21 million), primarily due to a significant decline in revenue from the company's profit sharing agreements.

Direct costs of sales rose 4.4%, slightly more than sales did, and gross profit rose 2.7% to HUF 35.63 billion or 56.2% of sales.

R&D expenses represented 11.7% of sales and rose 12.8% to HUF 7.41 billion as clinical trials undertaken in cooperation with Forest Laboratories advanced.

The group spent HUF 2.26 billion on investments in Q1 less than the HUF 3.39 billion spent in the base period.

Administrative and general expenses fell 6.3% to HUF 4.32 billion.

Operating profits fell 15.3% to HUF 10.53 billion. Net financial income fell to HUF 943 million from HUF 9.75 billion a year earlier as the forint firmed markedly from its lows in Q1 2009, resulting in unrealized financial losses instead of large unrealized gains a year earlier, and profit realized on financial operations also dropped by two-thirds.

Profit before taxes fell 47.5% to HUF 11.79 billion in Q1.

Richter had consolidated net assets of HUF 393.3 billion at the end of March 2010, up 7.4% from a year earlier. Total assets rose 5.1% to HUF 442.2 billion.

The company is listed in category 'A' of the Budapest Stock Exchange. The stock moved between HUF 29,300 and HUF 44,980 in the past twelve months. (MTI-ECONEWS)