Forex loss pulls down Ranbaxy Q2 PAT by 48%

Bogged down by a huge foreign exchange loss, pharma major Ranbaxy Laboratories today reported a sharp decline of 48.2 per cent in its profit after tax to $72 million (Rs 332 crore) for its second quarter ended June 30.

The company had a PAT of $139 million (Rs 693.1 crore) in the corresponding June quarter last year.

"There's a loss of $70 million (about Rs 325 crore) in the second quarter on foreign exchange," Ranbaxy Laboratories chief executive officer and managing director Atul Sobti said.

In the corresponding period last fiscal, the company had gained $176 million on forex. The consolidated sales witnessed a growth of 24.45 per cent to $458 million (Rs 2,102.9 crore) against $368 million (Rs 1,795.3 crore) in the quarter last year.

The growth was driven mainly by sales in North American region, which clocked $160 million (Rs 737.6 crore) in the second quarter of June, a growth of 100 per cent over the corresponding quarter last year.

In the domestic market the drug major's sales were almost flat at $4,487 million (Rs 448.7 crore ), while emerging markets recorded sales of $230 million (Rs 1,078 crore) a growth of just 6 per cent.

It however, contributed about 50 per cent to global sales. European sales stood at $69 million (Rs 319.5 crore), a growth of 15 per cent from the corresponding quarter previous fiscal, the company said.

CIS region recorded sales of $20 million (Rs 92.7 crore), a growth of 33 per cent over the same period last fiscal.

Further, African region achieved sales of $39 million (Rs 177.4 crore), a growth of 6 per cent, compared to the same period last financial year.

The company, which recently transferred its New Drug Discovery research assets to its parent firm Daiichi Sankyo, said it will considerably save on the research and development in the current fiscal.

"Clearly there would be savings of at least $20 million per annum due to the transfer of the New Drug Discovery research assets to Daiichi Sankyo," said Sobti, who will be quitting the firm on August 19.

Ranbaxy said Arun Sawhney, who is currently the president of Global Pharmaceuticals Business, has been appointed as managing director for three years to replace Sobti.

On US Federal Drug Administration's issues that Ranbaxy is facing regarding Paonta Sahib and Dewas facilities, Sobti said the matter would be sorted out soon.

"There will definitely be a forward movement regarding this matter in the next 3-4 months," he said.

In 2008, US FDA had imposed a ban on the import of 30 generic drugs from Ranbaxy's two plants located in Dewas and Paonta Sahib for violation of manufacturing norms and also on charges of falsification of data.

During the second quarter, the company launched Atorvastatin in Canada and South Africa.

The launch in Canada, came after the company's global settlement with Pfizer while in South Africa, the company was the first to a generic version of the drug.

Besides, the company launched 31 new products in India in the second quarter, including the its parent firm's anti platelet drug Prasita.

Reacting to the results, Ranbaxy scrip closed at Rs 445.20 on Thursday on the Bombay Stock Exchange, down 0.47 per cent from its previous close.