Lower sales hit Wockhardt profit

The troubled pharma major - Wockhardt has seen a fall of 14% in its consolidated net profit for the first quarter ended June 2013 on lower sales and higher input costs. The consolidated net profit went down to Rs 324 crore from Rs 378 crore in the similar period of last year. 

 

Its net sales increased by 1.3% to Rs 1358 crore from Rs 1342 crore. Other expenditure including staff cost and R&D spending went up by 30% from Rs 368 crore to Rs 477 crore during the first quarter.

 

However, shares of Wockhardt went up by 5% to close at Rs 440.25 on BSE. Brokerage houses were expecting 26-28% fall in Wockhardt's net profit at Rs 296 crore. 

 

On Wednesday, the Wockhardt management said  in a post earnings concall that the company's plant in Chikalthana, Aurangabad, which was inspected by US FDA recently, has received 483 observation. "The company plans to address all the concerns in a comprehensive response to US FDA along with corrective measures, expected within a week. The management is hopeful that US FDA will clear the unit at the earliest," officials said. 

 

An FDA Form 483 is issued at the conclusion of an inspection when an investigators has observed any conditions that violate the Food Drug and Cosmetic (FD&C) Act and related Acts. 

 

After import alerts, Wockhardt had plans to move 80% of production of the injectables from Waluj plant to other facilities.

 

Since company has received an 'import alert' from US FDA on one of its manufacturing unit located in Waluj near Aurangabad in May 2013 and related warning letter in July 2013, shares were keep falling. Shares which were trading at Rs 1644 on May 22, before the import alert, went down by more than 73% to close at Rs 440 on Wednesday.

 

For the quarter, the company has increased its R&D spending at 7.2% to sales which comes aound Rs 98 crore. Wockhardt filed 4 new product applications with US FDA during the quarter. Cumulative products pending approval with USFDA stands at 50 as on June 2013. 

 

According to company statement, Wockhardt’s international business contributed 82% of the total revenues during the quarter while US business recorded a growth of 11% in Q1FY14 and contributed 53% of the global revenues. The India business grew by 3% and the emerging markets business declined by 28% in Q1FY14. 

 

Over 7.01 crore equity share of the company pledged by the promoters have been released subsequent to end of the quarter and accordingly none of the promoters shares in the company are presently pledged, added the statement.