Ranbaxy Laboratories, India’s biggest drug maker, posted a loss for the second straight quarter on adverse foreign exchange fluctuations.
The loss mounted to Rs 679.80 crore in the fourth quarter ended December as it booked losses for a decline in the value of its foreign currency bonds and also for a change in the value of its foreign currency options. The local currency fell about 4 per cent in the quarter ended December 31. The company reported a foreign exchange-related loss of Rs 784 crore.
The drug maker, now controlled by Japan’s Daiichi Sankyo, had reported a profit of Rs 187.8 crore in the same period of the previous year. It reported a loss of Rs 395 crore in the third quarter ended September 2008.
Malvinder Mohan Singh, chairman and managing director, said changes in the accounting standards had resulted in the mark-to-market losses.
Total sales rose by 6.38 per cent to Rs 1,909.6 crore for the quarter under review.
The company did not give any growth guidance, saying it was difficult to make any predictions owing to uncertainties in the currency market.
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The US Food and Drug Administration (FDA) had cited record keeping and operational problems with the company. It banned about 30 Ranbaxy-made generic drugs in September.
Investigators are probing whether Ranbaxy submitted false data to the FDA to support generic drug applications, or tried to hide manufacturing violations. The company has denied the allegation.
The US drug regulator on September 16 blocked the import of medicines made in two factories by Ranbaxy. The US Food & Drug Administration said there was no evidence that Ranbaxy’s drugs were harmful.
The company had to write down $59 million due to US-related problems, it said.
Shares of the company, which has a market value of $1.6 billion, fell 9 per cent to Rs 186.10 ahead of the results.
Sales in North America, the company’s biggest market, fell 8.8 per cent to $103 million from $113 million in the year earlier. Sales in the region rose 14 per cent when converted to Indian rupees. Sales in Canada increased 88 per cent. European sales, including Romania, fell 13 per cent.
Ranbaxy may shift some generic drug production to the US from India or buy factories approved by the US Food and Drug Administration in response to an import ban by the US, Singh said on January 15.