On Friday, Bioton lowered its net profit guidance for 2006 from PLN 100m to PLN 90m. The reason for that is lower-than-expected sales on the Russian market. According to Bioton’s CEO, instead of US$ 20m, Russian sales should come in at only US$ 15m this year, with US$ 12m coming in the fourth quarter. Full year total sales should come in at PLN 240-250m, versus PLN 260-300m guided previously. At the same time, Adama Wilczega stated that Russia will be “the locomotive” of profit growth in years to come. Revenues on this market should arrive at US$ 50m next year. According to the CEO profit growth next year should be high double digits.
Our view: The news out during the session on Friday had a negative trading impact. Note that around a third of 2006 net profit will be boosted by one-off non-cash recognition of negative goodwill from acquisition of SciGen.