Record Q clean EBIT overshadowed by one-offs

Summary: Richter posted its Q2/25 results today morning. The Company beat analysts’
estimates in terms of revenues by +3% and clean EBIT by +8%, while net profit for Q2
missed estimates by -6%, but we pointed out after Abbvie’s Q2 report that the consensus
may have underestimated the value-add of CNS. Quarterly clean EBIT amounted to a
record of HUF 79.6bn, but net profit reached HUF 51.8bn. It was shaped by one-offs,
which overall dragged on earnings. On the one hand, higher-than expected clean EBIT was
attributable to the CNS, the main growth driver of operating incomes, delivering 73% of
clean EBIT in the quarter. A milestone income also contributed to the outstanding results
as Richter received HUF 4.5bn after RGH-932 entered Phase 2 development in
Generalized Anxiety Disorder, the second Phase 2 clinical trial related to the molecule. On
the other hand, inventory impairments wiped out nearly HUF 5.4bn in reported EBIT terms,
which fully meant the difference compared to our bottom-line estimate. In addition, net
financial loss of nearly HUF 10bn was also a bit wider than expected. Richter generated an
outstanding FCF of HUF 51bn in Q2. The management reiterated its guidance as they see
both revenues and clean EBIT to grow by around 10% this year. Foreign investors
continued to dump Richter shares in Q2 as the foreign participation fell to 60.8% by the
end of June.