Hungary's Richter profit jumps 144% on FX gains, keeps 2024 guidance

Richter Gedeon Vegyeszeti Gyar Nyrt

06/08/2024 11:47

BUDAPEST, Aug 6 (Reuters) - 
    Pharmaceutical company Richter  GDRB.BU  exceeded analyst
expectations with a massive jump in quarterly profit on Tuesday
thanks largely to foreign exchange gains, and the Hungarian firm
reiterated its guidance for 2024.
  
    Revenues grew to 213 billion forints ($586.31 million) in
the second quarter, up 16% on the year, bringing it to 413
billion forints for the first half, up 14% year-on-year. 
    "FX-adjusted revenue growth was 12.5% in H1, as the weaker
HUF (forint currency) provided some tailwind to the reported
numbers," the company said.
        A weaker forint makes the firm's exports more affordable
for buyers abroad, which could increase market share and export
volumes. This year, the firm benefited from forex gains after
significant losses last year.
  
    Net profit jumped nearly 144% to 70 billion forints in the
second quarter, from 28.7 billion last year. Net profit in the
first half nearly doubled from a year ago to 138.2 billion
forints.  
    "The change continues to be driven by volatile exchange rate
movements. In H1 2024 Richter booked HUF 21bn FX gains (nearly
all of that non-cash, unrealized gain on working capital items)
due to the weaker HUF, as opposed to large FX losses of HUF 49bn
suffered a year ago," they said.
    "The impact of the RUB (rouble) weakness is slowly fading,
while the weaker HUF (forint) provided some tailwind for
reported sales in Q2 across all segments," the company added.
    The company reiterated its 2024 guidance, saying it has
reached roughly the middle of its expected profit for the year.
    "Profitability improved across the business and we remain
well on track to meet our full-year ambitions and targets,"
Richter CEO Gabor Orban said in a statement.
    Orban welcomed a decision last month by the government to
phase out windfall taxes on drug companies from 2025. These
taxes had been introduced in 2022 in some sectors to plug holes
in the budget.
    Sales to Russia were 33 billion forints ($90.84 million),
down 8.1% in forint terms but up 7.8% in rubles. 
    "Business operations prevailed broadly at levels experienced
prior to the (Russia-Ukraine) war," the company said. 
    ($1 = 362.9800 forints)

 (Reporting by Anita Komuves
Editing by Bernadette Baum)
 ((KOMUVES.Anita@thomsonreuters.com;))