• Consolidated revenue may decline less than earlier expected
  • CEO raises Russian sales guidance on stronger demand

Hungarian drugmaker Richter Gedeon Nyrt. said revenue may fall less than earlier forecast this year on the back of stronger sales in Russia.

The company posted net income of 18.1 billion forint ($64 million) for the second quarter, down 19 percent from a year earlier. Revenue rose 1.7 percent while sales and marketing expenses increased 9 percent to 28 billion forint.

"The 25 percent weakening of the ruble seen in the first half of this year has had a very negative impact on all our numbers, " Chief Executive Officer Erik Bogsch told reporters in Budapest on Thursday. At the same time, "we are comfortable with raising our Russian sales forecast as the earlier expected drop in consumer demand hasn’t fully materialized," he said.

Group sales may decline by less than the earlier forecast 5 percent in euro terms this year as exports to Russia are expected to rise an annual 6 percent versus the 3 percent increase projected earlier, Bogsch said. He left the sales guidance for all other markets and products unchanged.

Cash Stock

Operating margin may be 11 percent this year, an increase from the earlier projection of 10 percent, he said.

Richter’s shares traded 1.1 percent lower at 5,910 forint by 11:02 a.m. in Budapest, after falling as much as 2.7 percent and shaving this year advance to 7.5 percent. About 92,000 shares changed hands, just over a quarter of the full-day average of the last three months.

The company’s cash stock of close to 40 billion forint allows for "smaller product acquisitions," though the drugmaker is open to larger acquisitions financed by credit, according to Bogsch. The focus is on strengthening the gynecological product portfolio, he said.

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