Gedeon Richter Reports Increased Profits

Quarterly operating profit growth was 10.1% without FX effects driven by favorable changes in the product portfolio mix and a relatively slower increase of operating expenses, the pharma company Gedeon Richter reports. In addition, no windfall tax was recorded in 2022 Q1.

Excluding FX effects Richter’s gross profit increased by 15.3%, driven by a 17.4% rise in Pharma segment revenues, and the drop in the weight of the Wholesale and Retail business in the mix.

Sales & Marketing expenses increased by a slower pace than Gross profits as some of the overhead costs were reallocated to G&A and as promotion activities are about to intensify in upcoming quarters.

General and Administrative (G&A) expenses were higher as a result of the reallocation of overheads plus the impact of the efficiency improvement project costs. R&D expenses uptake started slower.

Net financial income turned negative as last quarter’s headwind continued generating HUF 13 bn unrealized losses, despite Management’s actions to mitigate FX risks by hedging transactions.

Return on Equity (ROE) is calculated on the cumulative profit / loss for the period of last 4 quarters divided by the reported quarter's capital and reserves. The relative decrease of 1.6% is the consequence of Q4 2022 negative profit hit by the one-off effect of Windfall tax and unrealized exchange losses.

As CEO Gábor Orbán highlighted, “all four divisions are ahead of plan so far in the year with revenue growth balanced across markets and brands. Our figures were lifted further by currency movements, which in a year-on-year comparison, were still in our favor in the first months of 2023.”