Richter Gedeon - Hit By A Double Whammy Of Extra Taxes And Negative FX Effects
Hit by a double whammy of extra taxes and negative FX effects
Richter posted clean EBIT of HUF 21.9bn (-49% YoY) on net sales HUF 2234bn (+27% YoY) for Q4/22 on our calculation. Clean EBIT lagged by 38% behind of the consensus estimate of HUF 35.4bn (but it was 14% better than our estimate), while net revenue was in line with consensus forecast of HUF 221.3bn and 7% more than our estimate. As a result, clean EBIT (incl. extraordinary taxes) margin stood at 9.8% compared to consensus estimate of 16% and 23.7% YoY.
Richter recorded milestone income in the amount of HUF 1.9bn in Q422 (vs. HUF 1.6bn YoY) received from Abbvie for the acceptance by the FDA for review of the NDA request related to aMDD indication of cariprazine. At the same time, Richter recognized impairment losses on its three R&D development programs and reduced the value of the goodwill registered in the case of its Mexican subsidiary to a total amount of HUF 20.1bn in Q4/22. The extraordinary tax levied on the pharmaceutical industry at the end of December 2022 amounted to HUF 27.9bn.Clean net loss came in at HUF 20.5bn (vs. HUF 47.4bn profit YoY), significantly lower than the consensus estimate of HUF 14.5bn, driven mainly by FX.
Chemical Works of Richter Gedeon is a multinational pharmaceutical company that is engaged in the research, development, production and marketing and trade of pharmaceutical products. Co.'s activities are divided into two major business segments: Pharmaceutical, including research, development and manufacturing of pharmaceutical products; and Wholesale and Retail including wholesale and retail trade through the distribution chain as well as marketing of its products. Co. is primarily engaged in production of gynecological, cardiovascular and gastroenterological products, antibiotics, antimicotics, OTC and medicines for treatment of the central nervous system.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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