Hungary’s Gedeon Richter has posted a major decline in net profits for the first half of 2008, hit by the impact of the country’s strong currency.

Net income fell 29.2% to 13.1 billion forints ($85.8 million),though sales were up 3.2% to 114.8 billion forint. Chief executive Erik Bogsch said that the results were hit hard by high taxes domestically and the strength of the forint which has been hitting record highs versus the euro.

In geographic terms, most of Richter’s growth is coming from the Commonwealth of Independent States and Russia, while sales in eastern Europe were strong. However, the firm suffered revenue declines in the USA, while the “unfavourable macroeconomic and regulatory environment”, plus further price reductions are hurting the firm in Hungary.

As a result, Richter plans to cut its local staff by 200 people, and intends to implement cost-cutting measures all across the organisation. The company also noted that Norway-based investment fund Skagen AS has acquired a 5.2% stake in the Hungarian group.