BUDAPEST (Reuters) - Hungarian drugmaker Richter GDRB.BU posted a close to 32% jump in first-quarter net profit on Friday and raised its operating profit margin guidance on favourable exchange rates and coronavirus-related cost reductions.
The profit jump was helped by stockpiling of certain medicines towards the end of the quarter because of the coronavirus outbreak, Richter said.
“Stockpiling was seen in several markets, mainly in terms of toilet paper. However, this also manifested in pharmaceutical sales to some degree,” Chief Executive Gabor Orban told an online press briefing.
He added that this effect, which was strongest in Central and Eastern Europe, would not carry over into the remainder of the year and higher accumulated stocks would probably limit sales prospects in the coming quarters.
However, the company also said its 2020 operating profit margin is now expected to come in 14.5%, above its 12.5% guidance in February, with sales and marketing costs dropping below previous expectations because of restrictions to contain the spread of coronavirus in its main markets.
Richter’s shares firmed by 0.2% to 6,740 forints ($20.89) in early trade, against a 0.6% gain for the Budapest market’s main index .BUX.
The company cut its full-year revenue growth forecast to 3% from the 5% guidance issued in February. In its main Russian market, Richter expects revenue to rise by 3%, while in Western Europe revenue is forecast to decline by 3%.
Richter said it expects higher royalty income from its Vraylar anti-psychotic product, based on the latest analyst forecasts, but sales of Esmya are forecasts to drop to only a few million euros because of sales restrictions, Orban said, as health regulators assess its possible harmful side-effects on the liver.
Reporting by Gergely Szakacs; Editing by David Goodman