Ranbaxy posts a turnaround

Helped by reversal of forex losses and launch of new drugs in the US, Ranbaxy Laboratories today swung to a consolidated net profit of Rs 262 crore for the fourth quarter ended December 2009, compared to a net loss of Rs 680 crore in the year-ago quarter.

The Daiichi-Sankyo-owned drug maker logged a net profit of Rs 311 crore for 2009 against a net loss of Rs 935 crore in the previous year. The company’s financial year runs from January to December. Sales during the year rose 19 per cent to Rs 2,270 crore.

Atul Sobti, CEO and managing director of the company, attributed the turnaround to reversal of forex losses, launch of new drugs in the US, pick up in sales in some markets and cost containment measures.

This year, the drugmaker managed a forex gain of Rs 149 crore as against a loss of Rs 749 crore in the previous one.
 

FACTSHEET
	Oct-Dec
	2008	2009
Net profit	-680	262
Sales	1,910	2,270

	2008	2009	2010*
Net profit	-935	311	460 (up 48%)
Sales	7,256	7,344	7,800 (up 6%)
(All figures in Rs crore)                                   *Projected Source: Ranbaxy's consolidated audited numbers

“We have seen sales pick-up in a lot of countries. Russia, for instance, bounced back,” said Sobti. While sales to markets in Africa, Asia-Pacific and India picked up, the company witnessed declining sales in the US. During the year, sales in the US were down 14 per cent to Rs 1,613 crore.

Exports to United States from two of its facilities in India are banned as the company is facing probes from the US Food and Drug Administration and the US Department of Justice. “I am hoping that in 2010 we can find closure on both these fronts,” he said.

However, the company outlined aggressive projections for 2010. It expects a 48 per cent jump in net profit to Rs 460 crore and a 6 per cent growth in sales to Rs 7,800 crore. These estimates are based on an exchange rate assumption of Rs 46 to a dollar, a statement from the company said. Net profit projected for 2010 are not comparable with that of 2009 due to accounting changes.

According to him, growth in the current year would be fuelled by continued revival in the overseas markets as well as growth in India. “India is going to see a scale up in 2010.” he said. There would also continue to be first-to-file benefits in the US market during the year, he added.