New Delhi: India’s biggest drug maker Ranbaxy Laboratories Ltd posted a loss for the third straight quarter because of currency-related losses and falling sales in the US.
The net loss, including units, in January-March quarter was Rs761 crore ($153 million), compared with a profit of Rs137 crore a year earlier, the company based in Gurgaon, near New Delhi, said on Friday. Ranbaxy booked losses because of wrong-way bets on foreign currency hedges as the rupee weakened against the dollar for the fifth straight quarter. Sales in the US, the world’s largest drug market, also dropped 14% after the regulator there barred imports of some medicines made by Ranbaxy in India because of production deficiencies.
Wrong-way bets: Ranbaxy’s Malvinder Mohan Singh. Ramesh Pathania / Mint
First-quarter sales at Ranbaxy, controlled by Tokyo-based Daiichi Sankyo Co. Ltd, declined 4% to Rs156 crore.
Ranbaxy, the worst-performing stock on the benchmark Sensex index this year, fell 2.2% to Rs175.90 in Mumbai trading. The Sensex advanced 1.7%. The company expects to post a loss of about Rs800 crore in 2009 on full-year sales of Rs7,000 crore, according to an emailed statement.
Ranbaxy said on Friday it booked Rs919 crore as losses on foreign-currency options before tax. The company also wrote down the value of convertible bonds due 2011 as the Indian currency weakened 3.9% against the dollar in the three-month period, its fifth straight quarterly decline.
Sales in North America, which accounts for about 27% of Ranbaxy’s revenue, fell 7% to Rs404 crore. Sales in the US declined to Rs340 crore. Ranbaxy also said sales dropped 14% in Europe, and gained 9% in India.
The US drug regulator on 16 September blocked the import of more than 30 generic medicines made in two factories by Ranbaxy because of deficiencies in manufacturing processes. There is no evidence Ranbaxy’s drugs are harmful, though the violations may lead to defective products, the US Food and Drug Administration said at the time.
Ranbaxy may shift some generic drug production to the US from India or buy factories approved by the FDA in response to the US import ban, chairman Malvinder Mohan Singh said on 15 January.
Separately, the FDA said on 25 February Ranbaxy won’t be allowed to introduce new generic drugs from its Paonta Sahib factory, one of the two whose products were blocked last September, because of falsified data. Drugs from the Paonta Sahib plant were approved for sale in the UK and Australia after a joint audit by regulators, Ranbaxy said 23 March.