BUDAPEST--Hungarian pharmaceuticals maker Richter Gedeon Nyrt.
(RICHTER.BU) posted a larger-than-expected net profit for the first
quarter as it substantially cut back sales and marketing costs
after taking a massive hit in the previous quarter from the Russian
ruble's tumble, figures published Wednesday showed.
Consolidated net profit was 15.04 billion Hungarian forints
($55.3 million) in the first quarter, up 61% from HUF9.34 billion
in the same period of 2014, and a swing from a HUF4.19 billion net
loss in the previous quarter.
Earnings per share rose to HUF81 from HUF50 a year earlier.
The company, Hungary's largest drug exporter, also beat
analysts' expectations in a Portfolio poll for a net profit of
HUF11.5 billion.
As a result of lower sales and marketing costs, as well as a
reduction in research and development expenditure, operating profit
increased 37% to HUF13.85 billion in the January-March period.
Richter, whose product portfolio covers gynaecology, the central
nervous system, and cardiovascular therapeutic areas, generates
about 91% of its revenue abroad. Russian sales accounted for 24% of
its overall revenue last year.
Results received a boost from rising gynecological and related
product sales, increasing sales in core European Union countries,
the U.S. and China, and also from the devaluation of the Hungarian
currency as well as the euro against the dollar over the period.
The gross margin, a key indicator of profitability, was 63.3%,
higher than expectations for around 61% and also up from 62.5% a
year earlier.
Still, the devaluation of the Russian ruble against the forint
and declining sales in Ukraine continued to depress revenue, the
company said.
First-quarter revenue fell 0.7% to HUF87.68 billion from a year
earlier. Analysts had expected a 2.3% decline.
Financial operations, which were a major drag on the results
with a HUF15.47 billion net loss in the previous quarter because of
the Russian ruble's fall, showed some recovery. Net gain on
financial operation was HUF2.26 billion in the first quarter, a
swing also from a net financial loss of HUF1.15 billion a year
earlier.
Chief Executive Erik Bogsch is scheduled to give details about
the earnings at a 0700 GMT briefing Wednesday.
Richter shares ended up 0.1% at HUF4,475 on Tuesday on the
Budapest Stock Exchange while the benchmark BUX index closed 0.2%
higher.
Write to Margit Feher at margit.feher@wsj.com; Twitter:
@margitfeher
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