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Egis says tax hike, drug subsidy slash to dent profit Ft 1.6 bln next year

Egis Nyrt, Hungary's second-biggest drugmaker, said the government's plan to raise taxes and lower drug subsidies will reduce next year's pretax profit by as much as Ft 1.6 billion ($7.5 million.)

A new subsidy system that comes into force July 1 may lower Budapest-based Egis' pretax profit by Ft 800 million to Ft 900 million in the year ending Sept. 30, 2007, Chief Financial Officer László Marosffy told Bloomberg.

That year's profit will also be reduced by Ft 500 million to Ft 700 million by a 4% tax the government plans to introduce, Marosffy said. Other measures, such as higher energy costs, will trim profit by another Ft 100 million, he said.

The impact on the year ending in September will be less because of when the measures take effect, he said. The lower subsidies may trim as much as Ft 200 million from this year's profit, while the taxes may reduce profit by as much as Ft 50 million, Marosffy said. (Bloomberg)