Recordati experiences net profit growth
growth of 6.5 per cent to €18.5m in its third quarter results, as a
slump in sales was offset by lower costs.
The company, which specialises in the development of cardiovascular and urogenital therapeutic drugs, saw its sales drop by 2.7 per cent to €128m in the third quarter of 2006, compared with €132m in the 2005 quarter, a fall attributed to continuing pricing pressure in Italy
"The negative price effect will increase in the last quarter due to the further price cut of 5 per cent announced a the end of Semptember," said Giovanni Recordati, the company's chairman and CEO.
"However, the positive performance of our international activities also in the fourth quarter will allow us to mitigate the impact of these measures."
The company managed to reduce sales costs though and make a gross operating profit of €85.9m compared to €86m in the same quarter last year.
The firm's pharmaceuticals segment, which represents the majority of its business, saw a sales growth of 2.8 per cent to €121m while the pharmaceutical chemicals division only saw a modest 1.6 per cent increase, as the company divested product lines that were no longer profitable.
The pharmachem business accounts for 6 per cent of Recordati's total revenue and is currently being reorganised.
In January, the firm sold its pharmaceutical chemicals plant in Murcia, Spain, to Spanish Apotecnia for €13m, marking a further step in the restructuring of this division of the business, which will focus on products manufactured in the firm's other plant, located in Italy.
The company said that the third quarter saw two important events that have influenced its growth strategy: the approval of its new combination product Zanitech in Germany and the acquisition of Jaba Group's pharmaceutical business in Portugal, the third largest Portugese pharma group.
Recordati produces both active ingredients for its own proprietary pharmaceuticals, and active ingredients and intermediates for the generic drugs market, and exports around 90 per cent of its production of APIs and intermediates selling directly in over 50 countries.
The firm said it expected operating income for the whole year 2006 to be around €120m.