* Revenues seen rising by 3 pct in euro terms this year-CEO
* Operating profit margin seen at 14-15 pct of revenues-CEO
* Board considering 1-10 stock split to boost liquidity
* Shares down 0.9 pct, slightly underperforming market
(Adds detail, more comments, market reaction)
BUDAPEST, Feb 7 Hungarian drugmaker Richter
flagged a further fall in profitability for 2013 on
Thursday due to rising sales costs and higher research and
development spending on new products.
Richter earlier reported a 53 percent rise in fourth-quarter
net profit, recovering from a loss its financial operations
posted a year earlier and benefiting from declines in
administrative and other operating costs.
But for the full year, Richter's operating profit margin
fell to 15.4 percent of revenues from 19.8 percent a year ago
due to the cost of expanding its sales network in Western
Europe, as well as rising research and development spending.
Richter, which makes gynaecological, cardiovascular and
central nervous system drugs, said its revenues could rise by 3
percent this year from 1.13 billion euros in 2012, but operating
profit margin could sink further to 14-15 percent.
At 0937 GMT, its shares were 0.9 percent lower at 37,010
forints on the Budapest Stock Exchange, slightly underperforming
the blue chip index, which was 0.2 percent lower.
Chief Executive Erik Bogsch told a news conference Richter
expected sales and marketing spending to inch up to about 29
percent of revenues in 2013 from 28.4 percent last year, while
research and development spending is estimated at 12-13 percent,
a notch above 11.9 percent in 2012.
He said Richter received a milestone payment worth about $15
million in the first quarter after its U.S. partner Forest
Laboratories Inc. submitted a new drug application to
the U.S. Food and Drug Administration (FDA) for anti-psychotic
"In a favourable case this procedure can conclude by the end
of the year and in a favourable case the drug could hit the
market in 2014," Bogsch said, adding the company may receive
another milestone payment after FDA approval.
He said bargaining government price subsidies for Esmya, a
medicine to treat uterine fibroids, took longer than expected
but the company still expected revenue from this product to rise
more than four-fold to 15 million euros this year.
Bogsch said the company would not change its dividend
policy, which targets a payout of 25 percent of net profit to
However he added that Richter's board was considering a 1 to
10 stock split to boost the liquidity of shares, an idea that
has already come up several times in the past.
"The main goal is to boost liquidity," Bogsch said. "The
board is now leaning towards this, but a full assessment is
still under way."
(Reporting by Gergely Szakacs; Editing by Erica Billingham and