Ranbaxy reports loss ahead of Sun Pharma deal

Ranbaxy Laboratories, the drugmaker being acquired by Sun Pharmaceuticals for USD 3.2 billion, today posted a loss in the January-March quarter due to rise in finance cost and write-off related to regulatory sanctions.
Ranbaxy reported a consolidated net loss of Rs 73.65 crore in January-March as against Rs 125.75 crore profit in the same period last year.
The company sales were impacted due to a recent import ban by US regulators on its plants on concerns of poor manufacturing quality.
The Japan's Daiichi Sankyo-owned firm made a provision of Rs 62.95 crore in the quarter for inventory write-off and other costs related to the January ban imposed by the US Food and Drug Administration on its Toansa plant.

It also made a provision of about Rs 70 crore for impairment of goodwill in subsidiaries and reduction in the value of an investment in an associate, the company said in a statement without giving details.
Ranbaxy said its cost of foreign currency borrowing rose to Rs 114 crore in the quarter from Rs 52.52 crore a year earlier. Net sales rose marginally by 1 per cent to Rs 2,436.1 crore, as against Rs 2,411.1 crore in the year-ago period.

The company has changed its accounting year from January- December (calendar year) to April-March (financial year). Thereby, the current accounting year is for 15 months.

Ranbaxy Laboratories CEO and Managing Director Arun Sawhney said: "Despite multiple challenges, Ranbaxy met its sales guidance and continued to build on its strengths. At the same time we continued to work closely with regulatory agencies to address their concerns."
The company said it expects to resolve concerns of American regulator USFDA for its manufacturing plant in Mohali within a reasonable time and resume supply to the US market.
Overall expenses of the company stood at Rs 2,412.9 crore as against Rs 2,396.5 crore in the same period a year ago.
Ranbaxy scrip closed at Rs 464.50, down 1.06 per cent, on the BSE.

On April 7, Sun Pharmaceutical announced it will fully acquire the troubled Ranbaxy Laboratories in an all-stock transaction with a total equity value of USD 3.2 billion.
Under the agreement, Ranbaxy shareholders will receive 0.8 share of Sun Pharma for each share of Ranbaxy.
The combination of Sun Pharma and Ranbaxy will create the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India.
Imports of Ranbaxy products from all its four plants in India have been banned by American regulator USFDA for violations of manufacturing norms. In 2013, the company agreed to pay USD 500 million fine after pleading guilty to felony charges over manufacturing and distribution of adulterated drugs in the US.