Krka's Sales Surpass One Billion Euros at Mid-Year

In the first half of the year, Krka generated a net profit of 246.7 million euros, which is 11 percent more than in the same period last year. Operating profit increased by eight percent and amounts to 257 million euros at mid-year, the company reveals in its first business estimate. The growth in operating profit is comparable to the first three months.

Sales revenue increased by seven percent, surpassing one billion euros. The group achieved the highest growth in Eastern Europe, where revenues increased by eleven percent, reaching 370 million euros. Among other things, sales in Russia increased by twelve percent and in Ukraine by eight percent. Sales in Central Europe, which includes a belt of countries from the Baltics to Hungary, rose by seven percent, reaching 243 million euros. Sales in Western Europe amounted to 187 million euros, which is two percent more than in the first half of last year. In the Balkan countries, sales increased by eight percent, reaching 148 million euros. It amounted to 1.046 billion euros. In Slovenia, revenues increased by eight percent, reaching 64 million euros. Sales only decreased in markets outside Europe, which CEO Jože Colarič attributes to the situation in the Middle East.

By drug groups, sales of prescription drugs increased by seven percent, reaching 878 million euros. Sales of over-the-counter drugs and veterinary products increased by the same amount.

The mid-year profit growth is expectedly more modest than shown in the first quarter, mainly because the effect of exchange rate differences is somewhat smaller. In the first three months, Krka generated a net profit of 152 million euros, which is 54 percent more than in the same period last year. However, already in the first quarter, operating profit grew by a moderate seven percent, reaching 123 million euros. In the first half of the year, Krka generated 42 million euros in profit due to changes in exchange rates, most of it in the first three months of the year.

This year, Krka plans around five percent sales growth, surpassing the two billion euro mark. According to the company's plans, net profit will be slightly higher than last year and is expected to amount to 365 million euros. Recall: last year, Krka generated 1.9 billion euros in sales revenue and 357 million euros in net profit. For now, Krka is not changing the plans set in November last year.

CEO Jože Colarič announced that in August, Krka will begin construction of a production facility in India within a joint venture, which will produce its first products in two years. In the first half of the year, Krka allocated just over 40 million euros for investments.

Shareholders to Receive 71 Percent of Last Year's Profit

Krka's shareholders approved the company's proposal to distribute 71 percent of last year's profit as dividends, amounting to 252 million euros. The dividend is 8.25 euros gross per share, which at the current share price yields about a 4.2 percent dividend yield. Krka will start paying dividends on July 24. Krka's share price has risen by more than 40 percent this year and is approaching the magical 200 euros per share mark. A temporary correction in the share price is expected upon dividend payout.

Two New Supervisors, Two Terms Extended

In addition to profit distribution, shareholders will also elect four members of the supervisory board. The existing supervisors propose that Jože Mermal, Julijana Kristl, Sanja Savič, and Boštjan Furlan be elected for a new four-year term. Jože Mermal, who is the chairman of the BTC board, and Julijana Kristl received another term. Sanja Savič and Boštjan Furlan will replace Matej Lahovnik and Boris Žnidarič, whose terms are expiring.

Sanja Savič is a director in the legal services department at PwC Svetovanje. Boštjan Furlan is the director of Hella Saturnus and a member of the management board of Forvia Hella. The company's auditor for the next four years remains KPMG.

_______

​The content was originally published in Slovenian. We used artificial intelligence to assist with the translation. We apologize for any inconvenience.