Hungary's Richter to report impressive profit growth for Q1

What should we focus on?

• How did the sales of the company’s flagship products turn out? Richter’s U.S. partner, Allergan, realised Vraylar sales of USD 143.7 million in Q1, 70.3% more than in the base period, as a result of which Richter’s royalty income is likely to show a double-digit rise. Another question besides skyrocketing Vraylar sales is how Esmya sales fared in the first three months.
• Investors will focus on management guidance to be revealed at a press conference after the release of the earnings report, as well as whether the Food and Drug Administration (FDA) will approve the use of Vrayler for patients treated with bipolar disorder.

What results should we expect?

According to the median estimate of analysts, Richter will report a 5.5% rise in total income to HUF 120.2 bn in Q1. Every respondent projected an increase in sales.

Gross profit is seen up 4.2% in annual terms, while operating profit is expected to be largely flat (+0.3%), while after-tax profit is to be up 26.6%, according to the consensus estimates. Richter’s financial results should have been boosted by the weakening of the forint versus both the euro and the USD.

According to the median estimate, Richter will report a 5.5% yr/yr rise in total income to HUF 120.2 bn, on the back of rising Vraylar sales in the U.S., and larger Esmya sales in the EU.

The median forecast for Richter’s Q1 gross margin came in at 56.9%, which would mark an 0.6 percentage point yr/yr decrease.

Richter’s Q1 operating profit is seen up 0.3% at HUF 17.7 bn, while the market projects a 26.6% jump in the company’s after-tax profit to HUF 18.4 bn. Each respondent forecasts higher profit than in the base period.

Cover photo by Shutterstock

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