Drug major Ranbaxy Laboratories today reported a narrowed consolidated net loss of Rs 524.24 crore for the second quarter ended June 30,2013,mainly due to the impact of rupee depreciation on foreign currency loans and goodwill impairment in its operations in France.
The company had posted a net loss of Rs 585.72 crore for the corresponding period previous fiscal,Ranbaxy Laboratories said in a statement.
“The depreciation of the INR (rupee) against the USD,though favourable to Ranbaxy’s export business,had an adverse impact on the current quarter profitability.
“This was mainly on account of application of the accounting standards that require marking to market the entire derivatives and foreign currency denominated loans outstanding,” Ranbaxy said.
There was a net charge of Rs 540.3 crore during Q2 of FY 13 and Rs 495.4 crore during H1 of 13 on the P&L on account of the forex items,it added.
The macroeconomic environment continued to be challenging in certain countries in Western Europe. Specifically in France,the generic pharma industry has been impacted by continuing pricing and trade challenges,Ranbaxy said.
“The company has accordingly taken an impairment of goodwill of Rs 119.2 crore in France in line with the accounting standards,” it added.
Net sales of the company declined to Rs 2,633.20 crore for the second quarter,as against Rs 3,204.59 crore in the same period of previous year.
Commenting on the overall performance,Ranbaxy CEO & Managing Director Arun Sawhney said in a conference call that absolute sales were lower during the second quarter of this fiscal compared to the corresponding period sales of Q2 FY12 as these included contribution from exclusivities,mainly in the US.
“The company continued its focus on branded markets and business which will help navigate the growth of Ranbaxy in the coming years,” he added.
While on the one hand,the company is making commitments to growth,it is also consciously working on areas of efficiency improvement across the organisation,he added.
Shares of Ranbaxy Laboratories today closed at Rs 281.90 per scrip on the BSE,up 4.58 per cent from their previous close.
For the quarter ended June 30,2013 sales in North American market were at Rs 851.6 crore. In the USA,it was at Rs 770 crore,which is lower in comparison to the same quarter last fiscal due to large contribution to sales from exclusivity opportunities,Ranbaxy said.
In India sales for the quarter stood at Rs 542.6 crore in-line with the corresponding quarter.
“The domestic revenues were impacted due to slow growth in anti-infectives segment as well as the new drug policy,” Sawhney said.
On the company’s USD 500 million settlement with the US Department of Justice,Ranbaxy said it has paid the amount during the quarter.
Provision for this charge was created in the books in 2011,it added.
“With the payment of USD 500 million,provisioned earlier,we have settled both the civil and criminal settlements with the DOJ. This should allow us to focus our resources and energies to drive future growth,” Sawhney said.