Wockhardt net loss swells to Rs 565 cr

Drug major Wockhardt, which restructured its loans in July last year, has posted a net loss of Rs 565 crore for the quarter ended March 31, as against a Rs 10.2 crore net loss for the corresponding quarter of the previous year.

It said the losses were partly derivatives-related, plus non-cash provisions for impairment of its French subsidiary, Negma’s goodwill, due to the possible threat of generics to its principal product, amounting to Rs 633 crore. There was also an exchange fluctuation loss of Rs 16 crore.

The mark to market loss (from writing down the value of securities to current value) of Rs 331.5 crore and impairment of goodwill of Rs 266.2 crore for the quarter ended March 31 were exceptional items.

Wockhardt, which changed its accounting year to March-April, then posted a net loss of Rs 1,000 crore for the 15 months ended March 31. For the 12 months ended December 2008, the losses were Rs 138.9 crore. Total income for the 15 months was Rs 4,501 crore, whereas the previous 12 months had an income of Rs 3,589 crore.

Wockhardt had to restructure its debt following mark to market losses and mounting debts due to expensive acquisitions. The company sold its German subsidiary, Esparma, to Mova GmbH for Rs 120 crore and veterinary business to French company Vetoquinol for Rs 170 crore. The promoter Khorakiwala family also sold 10 hospitals to Fortis Healthcare for Rs 909 crore. An attempted deal to sell its nutritional business to Abbott had to be called off due to opposition from a section of lenders.

Wockhardt said its UK business grew by 19 per cent compared to the industry growth of only five per cent in January-March 2010 over the corresponding period of 2009. The domestic business of its Irish subsidiary, Pinewood Healthcare, was back on track after its sluggish growth in 2009

Wockhardt’s India branded business grew by 24 per cent in January-March 2010 over the same period last year. Eight of its products now feature in the list of ‘Top 300’ brands of the industry, with two in the ‘Top 100’. Wockhardt’s major brands are growing at over 26 per cent, said the release.