Ranbaxy posts net loss of Rs 73.6 crore on write-offs running year

Mumbai, 10 May-2014(PTI): Leading pharma company Ranbaxy on Friday reported a consolidated net loss of Rs 73.6 crore for the January-March quarter due to write-offs related to regulatory issues for poor manufacturing quality.

Ranbaxy posts net loss of Rs 73.6 crore on write-offs running year

05 guildhall planning mtg 31 march

Ranbaxy planning mtg 31 march (Photo credit: Vertigogen)

In the corresponding quarter of the previous fiscal, the company recorded a net profit of Rs 125.75 crore.

Consolidated sales grew marginally to Rs 2,436 crore during the quarter under review compared with Rs 2,411 crore, an increase of 1.03%, because of sales growth in major markets of USA, India, West Europe and Latin America.

At a standalone basis, the company reported a net profit of Rs 897 crore for the quarter ended March 31, 2014 as against Rs 70 crore during March 31, 2013.

During the quarter, the company recorded inventory provisions towards write-offs and other costs as well as towards goodwill impairment write-offs of Rs 15.9 crore and Rs 43.8 crore respectively.

In a statement on BSE, the company said, “The board of directors vide resolution dated October 29, 2013 has approved the change of financial year of the company from January-December to April-March effective April 01, 2014. In view of this, the current financial year is for a period of 15 months i.e. January 01, 2013 to March 31, 2014 and, accordingly, the figures for the fifteen months ended March 31, 2014 are not comparable with the figures for the year ended December 31, 2012.”

Arun Sawhney, CEO & managing director, Ranbaxy, said, “Despite multiple challenges, Ranbaxy met its sales guidance and continued to build on its strengths. At the same time we continue to work closely with the regulatory agencies to address their concerns.”

Branded and over-the-counter (OTC) category, which account for 54% of total sales during the quarter, contributed for Rs 1,320 crore. Generics including active pharmaceutical ingredients (API) category recorded Rs 1,120 crore of sales for the company during the quarter.

The North American sales for the quarter stood at Rs 840 crore, a growth of 13% over the corresponding quarter. The Indian business recorded sales of Rs 550 crore during the quarter with the OTC business (consumer healthcare) contributing around Rs 80 crore. In the US market, the company has maintained its strong market share in Absorica (indicated for the treatment of severe recalcitrant nodular acne in patients 12 years of age and older) which was around 22% as on march 28.

Sawhney, during the earnings call, said, “The sales had been impacted due to the voluntary suspension of shipments of all products from the Toansa and Dewas API facilities to the international markets temporarily. This decision was taken as a precautionary measure and out of abundant caution to allow the company to assess and review the processes and controls.”

Ranbaxy has recently announced its intent to merge with Sun Pharmaceutical Industries in an all-stock deal that will create the fifth largest specialty generics company in the world and the largest pharmaceutical company in India. However, the transaction will need various regulatory approvals. When asked about the minority shareholders’ approval, Sawhney said the deal requires 75% approval of all the shareholders. The company has been under the US Food and Drug Administration (FDA) scrutiny for a while for not complying with the good manufacturing practices. All the four manufacturing facilities (Mohali, Dewas. Toansa and Paonta Sahib), which cater to the US market, are under the FDA import ban.