Ranbaxy Laboratories, India's biggest drug-maker, registered a third-quarter loss of Rs 395 crore as compared to a profit of Rs 235 crore a year earlier.
Ranbaxy took the hit on account of foreign exchange losses and writedown of inventories arising out of a US import ban. The drug-maker hinted that the results would have an impact on the 18 per cent growth guidance given by the company earlier.
Ranbaxy’s Japanese owner Daiichi Sankyo also announced its results today in Tokyo, where it said that it would include the Indian company’s earnings from this month. The Japanese major also said that it would cut its annual profit forecast because of costs to buy Ranbaxy. Daiichi Sankyo had completed acquisition of 54 per cent stake in Ranbaxy a few weeks ago.
Ranbaxy's earnings were hurt by a one-time writedown of the value of its foreign currency convertible bonds (FCCBs) after the local currency posted its biggest quarterly decline in 16 years. Sales in America were also hit as the US Food and Drug Administration (FDA) blocked the import of 29 generic medicines made by Ranbaxy in India because of deficiencies in manufacturing processes.
Ranbaxy posted a $73-million translation loss on its foreign currency debt because of the adverse movement of rupee, and wrote down the value of its inventories by $59 million after the US import ban, the company’s Chief Executive Officer (CEO) Malvinder Singh told reporters here today.
The rupee dropped to 46.99 against the US currency as compared with 39.84 in the corresponding quarter of the previous year.
Analysts said that Ranbaxy’s results were much below their expectations. "Sales were on expected lines. However, margins have reduced drastically. The operating profit is well below our expectations," said Sarabjit Kaur Nagra, analyst with Angel Broking.
"If you take out the exceptional items, our growth has been in the range of 14 per cent. Our US sales were hit by 7 per cent, but we continued to grow well in other countries. The US FDA impact was limited to that country and has not affected sales elsewhere. While the US sales will continue to be affected in the coming quarter, the impact will be less as there will be no writedowns due to inventory losses," Singh said.
Ranbaxy’s revenues rose by 14.3 per cent to Rs 1,888 crore as compared to Rs 1,652 crore in the corresponding quarter last year.
