Industry Trend Analysis - Improvements In Russia Will Boost Richter's FY17 Sales Performance - OCT 2017

BMI View: Gedeon Richter has weathered the storm of economic and foreign exchange weaknesses in Russia and the country's more stable footing has led to a healthy increase in sales in the company's most important pharmaceuticals market. Performance has improved in most of Richter's regional markets; of particular note has been a near-doubling of sales in the US in H117 compared to H116. Richter can anticipate FY17 sales worth over HUF500,000mn (USD1,745mn).

For H117, ended June 30 2017, Gedeon Richter reported total revenues of HUF226,789mn (, up by 21.1% over the HUF187,272mn reported for 6M16. The firm noted that whilst improving sales performances characterised most of its markets, the main drivers of growth by geography were Russia, the EU 15 region, comprising those countries that have joined the EU prior to May 2004, and the US. Weaker period end rouble exchange rates resulted in a net financial loss of HUF3,902mn (USD13.6mn), primarily as a result of reassessment losses. However, profit from operations grew by 21.9%, from HUF26,494mn to HUF32,301mn (USD112.7mn). Profit attributable to owners of Richter's parent company fell by 2.9%, from HUF29,027mn in H116 to HUF28,196mn.

Pharmaceutical sales accounted for the bulk of Richter's sales in H117, and were worth HUF187,990mn (USD656.1mn). This was equal to 82.9% of total revenues, and was up by 19.5% over the HUF157,291mn reported a year earlier.

Richter Revenues Show Healthy Increase
Gedeon Richter's H1 Results (HUFmn)
Source: Gedeon Richter, BMI

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