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Krka Ups Q1 Profit by 6% to EUR 51.4M

Novo mesto, 16 May (STA) - The group around pharma company Krka posted a profit of EUR 51.4m in the first quarter of 2013, up 6% over the same period last year. The core company upped profit by 4% to EUR 50m, the company said on Thursday.

The group saw sales rise 8% to EUR 294.4m compared to the same period last year, while the core company upped sales by 10% to EUR 284.4m.

Sales outside Slovenia, which accounted for 93% of the group's total sales, grew by EUR 22.7m or by 9%.

The group sold EUR 242.8m worth of prescription pharmaceuticals, a 5% increase compared to the first quarter last year. Prescription pharmaceuticals represent over 82% of Krka Group sales, the company said.

Krka chief executive Jože Colarič told a press conference today that he was satisfied with the results considering the market situation.

The company's leading sales region is east Europe, where Krka generated 34% of its total sales. Russia, the company's largest individual market, saw sales grow 30% to EUR 70.3m. Krka achieved notable success also in Poland, where sales increased by 19% to EUR 30.5m.

In the first quarter, Krka allocated EUR 30m for investment, most of which will go for increasing and modernising production capacity and research and development infrastructure.

In Slovenia, major investments include the construction of Novo mesto-based production plant Notol 2, which is expected to be complete in 2015, and the Krško-based Sinteza 1 plant, where works are scheduled to begin next year. The Krško investment will cost EUR 85m in the first phase, Colarič said.

Some smaller investments were also made into the central complex in Novo mesto and Terme Krka spa. In Russia the company plans to initiate test production at the EUR 135m Krka Rus 2 plant, Colarič said.

The group's Q1 operating profit stood at EUR 58.4m, up 7% over the same period last year. Profit before tax amounted to EUR 60.7m and was up 1%.

Krka Group employed 9,654 people at the end of March, a 2% increase compared to the beginning of the year. The number of employees in subsidiaries and branches abroad has exceeded the number of employees in Slovenia for the first time in Krka's history, the company added.

Commenting on government plans to increase the VAT rate, Colarič said Krka's operation would be unaffected as most of the pharma company's revenues come from abroad.

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