RCI sees Romaia's Biofarm Q3 net profit flat y/y

Biofarm is seen posting a net profit of 15 million lei in the first nine-months of the year, up from 13.8 million lei in the same period of 2011, Raiffeisen Capital&Investment Research (RCI) said in a preview of Biofarm's third-quarter results.

The blue-chip drug maker will release its third-quarter and nine-month results on November 14.

For the third quarter, RCI expects the company to record a 17% annual growth in sales, given the low base in the third quarter of the previous year and the intense marketing campaigns.

"The intense marketing efforts should be reflected in elevated third parties costs, which along with higher raw materials costs (given that most of them are imported and RON depreciated) should depress EBIT. The intense debated claw-back tax should have a limited impact for Biofarm (less than RON 1 mn) as Rx drugs, for which the tax applies, account for only 25% of BIO’s portfolio," RCI also said.

Following are some of RCI's projections for Biofarm's results (in millions of lei):

Biofarm's shares closed 0.31% down at 0.195 lei on the Bucharest Stock Exchange on Tuesday.

RCI has set its target price for Biofarm at 0.23 lei and issued a Buy recommendation for the stock.

(1 euro = 4.537 Romanian lei)