Mumbai: Biotechnology firm Biocon Ltd on Tuesday said fourth quarter profit declined 62% on account of mark-to-market (MTM) losses. The company posted a consolidated net profit of Rs24.88 crore for the quarter ended March, against a net profit of Rs65.30 crore in the year-ago period.
“Fiscal year ’09 has been one of our most challenging years, wherein foreign currency volatility made it difficult to manage a sharply depreciating rupee resulting in large MTM losses,” chairman and managing director Kiran Mazumdar-Shaw said.
MTM is an accounting practice of assigning a value to a position held in a financial instrument based on the current market price for that instrument.
Challenging times: Biocon CMD Kiran Mazumdar-Shaw. Hemant Mishra / Mint
The company’s consolidated total income increased to Rs486.56 crore for the quarter under review from Rs279.22 crore a year ago, Biocon said in a filing to the Bombay Stock Exchange (BSE).
“Consolidated FY09 earnings have also been burdened with the impact of added depreciation of Rs16 crore, reflecting capital investments incurred to support future growth,” the company said. The “unpredictable rupee depreciation induced by the global economic crisis has adversely impacted consolidated FY09 earnings, wherein losses of Rs147 crore on account of MTM were provided”.
Total income increased to Rs1,673.22 crore in the March quarter of FY09, from Rs1,090.20 crore in the same period last year.
Mazumdar-Shaw said the company’s new hedging strategy would be able to address the years ahead with a sense of confidence and resilience.
“Our branded formulations business under our healthcare umbrella has made rapid strides in garnering market share for our key brands in cardiology, diabetology, nephrology and oncology. We see this as being a high growth segment in our business strategy going ahead,” she added.
On a stand-alone basis, Biocon posted a net profit of Rs24.14 crore for the quarter ended March, against Rs62.03 crore a year ago.
Total income rose to Rs239.84 crore in the March quarter of FY09, from Rs236.71 crore last year.
For the year ended 31 March, the company reported a net profit of Rs111.81 crore, compared with Rs434.94 crore a year ago. The total income increased to Rs987.12 crore during the period, from Rs929.21 crore a year ago.
The company has announced a 60% dividend, or Rs3 per share.
Biocon closed at Rs145.45, down 0.34%, on BSE on Tuesday, a day when the exchange’s benchmark index, the Sensex, lost 3.25%.