Net Profit Rises 22% at Krka

By , 19 Nov 2020, 12:34 PM Business
Net Profit Rises 22% at Krka

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STA, 19 November 2020 - The group around the drug maker Krka generated EUR 1.16 billion in sales revenue in the first nine months of the year, which is 6% more than in the same period last year. Net profit was up by 22% to EUR 210.14 million. Sales were up the most in east Europe, where the most revenue was generated.

Operating profit jumped by 57% to EUR 300.75 million and profit before tax, depreciation and amortisation (EBITDA) increased by 40% to EUR 384.6 million, the group said on the web site of the Ljubljana Stock Exchange.

According to CEO Jože Colarič, the group was successful in the first nine months, posting record results. "We have adjusted some business processes and started using e-communication tools more. Our good financial situation, broad range of quality pharmaceutical products, undisturbed production and supply, and innovative approaches in all areas of our work have allowed us to achieve our strategic goals," he said.

In the first quarter, a notable rise in demand and sales was recorded along with an increase in supply of the products in the distribution chains because of the epidemic. Subsequently, demand was somewhat lower in the second quarter. In the third quarter the impact of the pandemic on sales decreased, so sales returned to the level that had been planned.

In the absence of autumn and winter colds, a significant drop was recorded in the sale of antibiotics and seasonal over-the-counter drugs this year compared to previous years. However, more prescription drugs for chronic therapies were sold on some markets and more veterinary products for disinfection.

In terms of quantity, sales were up by 8% in the January-September period, and the group exported 96% of its products. The biggest absolute and relative growth was recorded in eastern Europe, where most of the sales, 32.6%, were generated.

"Sales were up compared to the same period last year in all regional markets, except Turkmenistan, but the crucial growth was that in Russia, a leading market for the region and Krka's largest individual market, where we have achieved the biggest absolute sales growth in the region.

"In Russia, we sold products worth EUR 240.3 million, thus exceeding last year's figure by 10%," Krka said in its business report.

The group allocated EUR 53.8 million for investment in this period, EUR 39.9 million of which went to the controlling company. Because of the pandemic, investments in construction were lower than planned.

The core company saw an 11% increase in sales revenue to EUR 1.12 billion in the first nine months, while net profit was up by 13% to EUR 197.26 million.

At the group level, the sale of products and services for the entire 2020 is expected to reach EUR 1.52 billion, which is 2% more than in 2019.

Prescription drugs remain the most important group of products, accounting for 85% of total sales. "We expect that because of the value and quantity of the products sold profit will exceed plans and stand at some EUR 260 million," Krka said.

But the final results could be affected by coronavirus restrictions that are also affecting the stock market, and Russia's ruble.

Next year, the group expects sales to reach EUR 1.53 billion and profit to stand at EUR 265 million. The group also plans to increase its workforce in Slovenia and other countries by just over 1% in total.

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