Business News

Krka Ups Revenues and Profit Last Year (adds)

Novo mesto, 21 January (STA) - Pharma group Krka generated EUR 951m in revenues in 2009, one million more than in 2008. Revenues at the level of the parent company rose by 3% to EUR 850m, while net profit increased by 6% to EUR 170m. The group's net profit was a few million euros higher.

Some EUR 90m of the net profit is the result of releasing the provisions for some patents, especially for atorvastatin for lowering blood cholesterol, Krka CEO Joze Colaric told the press on Thursday.

Krka made EUR 47.5m in provisions for this year, above all because of the proceedings launched by the EU for suspected infringement of the patent hypertension drug for pernadopril.

Krka again denied violating any anti-trust regulations in the case involving five generic pharma companies. Krka however formed reservations in line with the principle of good management, although it expects to release them before the end of the year.

In July, the European Commission launched formal proceedings against Krka and four other generic makers as part of an anti-trust probe at French Les Laboratoires Servier, saying it suspected them on making an agreement on delaying market entry of the generic form of perindopril developed by Servier.

The group observed the highest rise in sales revenues in Central Europe (+6%), while the sales in Slovenia went up 1%. Sales in Western Europe and on overseas markets remained level. In Southeast Europe, the sales dropped by 5% and in Eastern Europe by 4%.

Krka generated the highest share of its revenues in Central Europe (28.1%) followed by Western Europe and overseas markets (23.7%), Eastern Europe (23.6%), Southeast Europe (13.5%) and Slovenia (11.1%).

Unaudited results will be available at the end of February.

In 2010, Colaric expects net profit to amount to EUR 160m, while revenues are expected to go up by 6% to EUR 1.08bn.

The company will continue to invest in research and development, which already presents some 9% of its sales. Colaric noted this was above the EU target and significantly more than the share invested in R&D in Slovenia - 1.7%. In 2009, Krka spent some EUR 91m on investments.

Colaric also turned to the difficulties the company was facing on foreign markets, above all depreciation of foreign currencies, which led to lower prices on local markets, lower margins and in turn lower revenues and profit. He expects pressures on margins to continue in 2010.

Krka does not fear a takeover by any company, not even the world largest generic pharma company, Israeli Teva, which announced two weeks ago that it would be acquiring companies in Europe and was especially looking for those operating in Central and Eastern Europe.

Being the 10th largest generics maker in the world and 7th in Europe, Krka is one of the most wanted pharma companies for acquisition in the world, it is however determined to remain independent, Colaric added.

A survey carried among job seekers in the autumn by employment web portal selected Krka as the most attractive employer in Slovenia.

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