Business News

Krka Nine-Month Profit Up 12% (II)

Novo mesto, 25 November (STA) - Drug maker Krka reported a net profit of EUR 120.9m for the first three quarters of this year, up 12% over the same period last year. Nine-month revenues at the Novo mesto-headquartered group were up 5% to EUR 726.6m.

The results are in line with Krka's business plan, which anticipates that the group will finish the year with revenues in excess of EUR 1bn.

Chairman Joze Colaric projected at Thursday's press conference in Novo mesto that the group would end the year with a net profit EUR 162m.

The core company Krka made a profit of EUR 132m in the nine months, up 17% year-on-year, on a turnover of EUR 692.8m.

In the period, the company was "troubled" by exchange rate differences, mainly of the Russian ruble, Colaric said, adding that he expected things would stabilize now.

The chairman projected a 6% rise in sales for next year and announced a plan to buy back up to 10% of own shares, which is to start shortly.

The group generated 89% of all its sales on foreign markets. The leading region for its sales was central Europe, where it generated 31% of the sales or EUR 223.9m, which is up 11% y/y.

The biggest growth was seen in exports to eastern Europe, which were up by 14% to EUR 167.4m, representing 23% of the group's sales.

Krka's biggest market was the Russian Federation where its sales rose by 11% to EUR 122.9m.

Exports to western Europe and overseas amounted to EUR 154.3m, which is down 8% and represents 21% of the overall sales.

Sales to southeast Europe were up 8% to EUR 102.9m, which accounts for 14% of the overall sales.

Sales at home were down 1% to EUR 78.2m, which Colaric blamed on lower sales of spa services as the spa complex in Strunjan was closed for nearly four months for renovation.

Krka allocated EUR 77.1m for investments in the first three quarters, while the figure for the year will stand at EUR 127m.

Some investments will continue next year, Colaric said, naming EUR 92m solid-dosage forms plant in Novo mesto, in which more than 2.5 billion capsules and tablets will be manufactured a year, and a EUR 23m-worth development and controlling centre.

Krka has also launched the construction of a EUR 135m production and distribution centre in Moscow, which is slated for completion in 2013.

Next year the company plans investment amounting to EUR 159m as well as a 4% increase in headcount in Slovenia and abroad, Colaric said.

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