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Richter Q1-Q3 profits rise 42.6% yr/yr

Hungarian drugmaker Gedeon Richter had consolidated after-tax profit of Ft 43.63 billion (€167.9m) in the first nine months of 2006, 42.6% more than in the same period a year earlier, its unaudited report, prepared with International Financial Reporting Standards (IFRS) and published on Tuesday shows.

Q3 profits came to Ft 12.096 billion, up 10.1% and slightly more than the Ft 11.92 billion estimate in a poll of analysts by portfolio.hu. Consolidated sales in Q1-Q3 were Ft 158.68 billion, 26.8% more than in the same period a year earlier. In dollar terms, sales rose Ft 16.4% to $744.6m. Richter's sales in Hungary rose slightly during the period, but sales in all of the company's other big export markets increased markedly. Domestic sales came to Ft 41.22 billion and export sales were 117.46 billion. Unconsolidated sales rose 25.4% to Ft 130.16 billion during the period. Richter noted that gynecological products continued to account for much of sales, generating 29% of revenue during the period. In dollar terms, sales of women's health products jumped 28.8% Year-on-year in Q1-Q3. Richter also stressed the high percent of revenue generated by products launched since the mid 90s. The products accounted for 48% of unconsolidated sales in Q1-Q3. Unconsolidated after-tax profits in the first nine months were up 39.5% at Ft 42.05 billion on rapidly growing sales and profits on export markets and substantially higher financial profits. Earnings were helped by financial profits of Ft 8.20 billion, up 66.2% from Q1-Q3 2005. Financial profits included Ft 3.07 billion in unrealized financial profits. Unconsolidated operating profit rose 33.5% to Ft 33.66 billion during the period. Consolidated diluted earnings per share was Ft 2,341, 42.6% more than in the Q1-Q3 2005. Unconsolidated EPS was Ft 2,256, up 39.5%. Consolidated pre-tax profit rose 41.4% to Ft 44.8 billion. Consolidated operating profit was Ft 35.80 billion, up 37.8%; Richter's operating margin was 22.6%, compared to 20.8% in Q1-Q3 2005. Richter said it would have to pay Ft 157 million on Q3 sales into Hungary's National Health Fund under an agreement signed between the state and drugmakers in 2005 to cover part of an overshoot of the drug subsidy fund.

In the H1, Richter paid Ft 316 million into the fund under the agreement. Last year it paid Ft 600 million. Richter's consolidated sales in CIS countries increased 49.7% Year-on-year to Ft 50.04 billion in Q1-Q3. (In dollar terms, sales to CIS countries rose less, increasing 37.5%.) Richter's unconsolidated profit and loss statement shows sales to Russia rose 34.3% Year-on-year to $169.4 million in Q1-Q3. Sales of drugs included on a special list of state-subsidized medicines generated revenue of $36 million, slightly more than in the same period a year earlier. Unconsolidated sales in Ukraine rose 31.4% to $24.5 million, and sales in other CIS countries were up 45.2% at $31.7 million. Sales in other EU countries rose 30.0% to Ft 37.22 billion, sales in the US were up 37.8% at Ft 14.02 billion and sales in other countries increased 30.8% to Ft 16.18 billion. The unconsolidated breakdown of sales shows sales in the EU-15 rose 23.1% to €42.1 million, while sales to new member states increased 23.4% to €67.4 million. On the cost side, consolidated cost of sales amounted to Ft 65.93 billion in Q1-Q3, 15.6% more than in the same period a year earlier. Sales and marketing costs rose 42.0% to Ft 30.63 billion, with their proportion to sales increasing to 19.3% from 17.2%. Administrative costs rose 59.5% to Ft 10.912 billion, mainly because of costs of new companies included in Richter's consolidation. Consolidated R+D costs came to Ft 11.36 billion in Q1-Q3, accounting for 7.2% of sales. The group had 8,407 employees at the end of September, up from 7,629 twelve months earlier. The parent company had 5,927 employees at the end of September, rising 31 from a year earlier. Richter had consolidated net assets of Ft 280.72 billion at the end of September, 19.9% more than twelve months earlier. Total assets were Ft 319.14 billion, up 22.1% in twelve months. Richter's stock of inventories rose 19.6% to Ft 52.12 billion during the same period. (Mti-Eco)