Ranbaxy posts loss of Rs 524 cr as domestic sales fall

Drug maker Ranbaxy Laboratories reported a net loss of Rs 524 crore ($85.28 million) for the June quarter on foreign exchange transactions and loss of goodwill booked at its overseas subsidiaries.

The company recorded foreign exchange losses of Rs 367 crore while it booked a loss of goodwill worth Rs119  crore at its overseas subsidiaries, it said in a filing to the Bombay Stock Exchange.

Ranbaxy, controlled by Japan’s Daiichi Sankyo, had reported a net loss of Rs 586 crore for the same period last year.

The company’s revenue for the quarter fell 17.84 per cent to Rs 2,633 crore in the absence of first to file opportunities in the US as against the corresponding quarter previous year. During April-June quarter, Ranbaxy’s recorded sales of Rs 851.6 crore in North America.

“Sales were lower in comparison to the corresponding quarter due to large contribution to sales from exclusivity opportunities in the earlier quarter,” the company said in a statement.  In the US, Ranbaxy clocked sales sales of Rs 770 crore, helped by strong base business sales encouraged by prescription growth in Absorica.

The company’s domestic sales also suffered during the quarter, primarily due to slow growth in the anti-infective segment and implementation of price control, Ranbaxy Chief Executive and Managing Director Arun Sawhney told investors during post-earnings conference call. In the domestic market, the company clocked sales of Rs 542.6 crore during the quarter ended June.

The company’s $500 million penalty towards its settlement with US Department of Justice was also adjusted during the quarter under review, the management said.

While investors expressed concerns about the company’s future plans and hovering uncertainty on product approvals due to several of its facilities facing regulatory hurdles related to manufacturing compliances procedures, the company management said it is confident that it will manage to get approvals as planned.

Sawhney also emphasized that going forward the company will focus on differentiated product portfolio in the US and will launch products primarily in the oral contraceptives and dermatology segment.

On Wednesday, shares in Ranbaxy ended at Rs 281.90 on the Bombay Stock Exchange, up 4.58 per cent from its previous close.