Sun Pharma net down 60% on Rs 685-cr impairment charges

Firm had said last month profits would be hit due to integration with Ranbaxy, remedial action at plants under USFDA scanner

The profitability of Sun Pharmaceutical, India’s largest pharma company by revenue, was down 60 per cent due to one-time and exceptional charges of Rs 685 crore. The exceptional charges relate to impairment of fixed assets, goodwill and other related costs following the acquisition of Ranbaxy.

The drug maker had said last month that its profitability would be adversely impacted in FY16 owing to expenses related to integration with Ranbaxy and remedial action at plants under US Food and Drug Administration scanner.



The consolidated net profit in the April-June period of 2015-16 stood at Rs 479 crore, against Rs 1,204 crore in the year-ago period. Revenue rose three per cent to Rs 6,522 crore. The result was declared after the close of trading hours.

Other operating income rose sharply from Rs 28 crore to Rs 235 crore, driven by proceeds from brand divestments as mandated by various competition authorities pertaining to the Ranbaxy acquisition. Sun had acquired Ranbaxy from Daiichi Sankyo for $4 billion. The earnings before interest, taxes, depreciation and amortisation stood at 24.7 per cent.

Ebitda for the first quarter of FY16 includes certain one-time charges related to restructuring and other write-offs. The adjusted Ebitda margin, excluding these one-time items, was 28 per cent compared to 30.2 per cent for the first quarter of last year.

 

"Our performance for the quarter has been impacted by certain one-time and exceptional charges, which will drive synergies and overall profitability improvement in the long-term," said Dilip Shanghvi, managing director, Sun Pharma.

Revenue from the US market was $488 million for the quarter under review, down four per cent over the year-ago period owing to competitive pressure on some products and temporary supply constraints arising from remediation efforts at the Halol facility. US revenue accounted for 47 per cent of the sales.

On the other hand, the domestic market grew in the first quarter of FY16. Sale of branded prescription formulations in India was at Rs 1,784 crore, up 11 per cent from a year ago. This accounted for 27 per cent of total sales.

The company's share price closed at Rs 841.80 apiece on the BSE on Tuesday, up 0.03 per cent from the previous close.