Germany's Stada Arz warns of risk of Serbian default

German drugmaker Stada Arzneimittel (STAGn: DE) has warned that the outstanding receivables due to its Serbian subsidiary Hemofarm AD from various Serbian pharmaceutical wholesalers are at an increased risk of default, as result of which a corresponding impairments and unscheduled depreciation amounting to around 97 million euros ($133.7 million) before taxes will be reported in the current third quarter as one-time special items.

Stada said it and Hemofarm are in talks with “all local market participants” and the Serbian state. Nevertheless, Stada shares plunged 15% to 19.75 euros at 2:45 p.m. in Frankfurt trading following the announcement. .

The impact on earnings after taxes is expected to be about 85 million euros. The company confirmed that regardless of this impairment and write-down, the group’s sales are expected to grow in the 2011 and 2012 fiscal years, along with its earnings adjusted for one-time special effects. In addition, the company holds its long-term group sales target for 2014 of 2.15 billion euros, EBITDA of about 430 million euros and net income of some 215 million euros.