UPDATE 1-Stada shrugs off Ukraine crisis to post flat net profit

Thu May 8, 2014 2:23am EDT

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* Q1 net profit 35.0 mln eur, in line with poll

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* Tumbling rouble weighs on sales in Russia

* Confirms full-year guidance (Adds details on business in Russia, Germany)

FRANKFURT, May 8 (Reuters) - Stada Arzneimittel AG , a German generic drugmaker which makes about 20 percent of its sales in Russia, shrugged off the effects of the Ukraine crisis to report rising sales and a steady net profit in the first quarter.

Quarterly net profit reached 35.0 million euros ($48.7 million), barely changed from the previous year and in line with the average estimate of 34.5 million in a Reuters poll.

The company in March scrapped its sales and profit targets for this year, blaming political tensions between Ukraine and Russia that have pushed the rouble to an all-time low.

The rouble has tumbled over 20 percent against the euro over the last 12 months, while Ukrainian hryvnia has plunged over 50 percent against the euro.

That depreciation weighed on the value of sales in Russia, which dropped 13 percent in the first three months of the year to 78 million euros. Excluding currency effects, however, sales were up 4 percent, suggesting the crisis has not sapped consumer demand as much as the company originally expected.

With medical insurers playing a lesser role in Russia than in Western Europe, business there is driven by consumers who pay for pharmaceuticals and non-prescription drugs out of their own pocket.

Sales in Stada's biggest market Germany were flat at 126 million euros, as strong seasonal sales of its branded products - treatments without patent protection but with a brand identity - offset declining revenue from its generic drugs.

German Health insurers are putting bulk purchases out to tender among generic drugmakers, triggering a price war for big contracts and prompting Stada to retreat in some market segments. ($1 = 0.7183 Euros) (Reporting by Caroline Copley; Editing by Ludwig Burger and David Holmes)

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