Ranbaxy Q1 net down 63%

Board declares dividend of Rs 12/share;  US sales fell to $80mn from $105mn.

Ranbaxy Laboratories Ltd's first quarter (January to March) profit after tax tanked 62.85 per cent to Rs 70.8 crore in 2005 from Rs 190.6 crore in 2004. "It has been an unusual quarter," Ranbaxy Managing Director and CEO Brian Tempest said.

The Ranbaxy board, which met here today, recommended a final dividend of Rs 12 per share for 2004. Earlier, the company had paid an interim dividend of Rs 5 per share.

Today's decision takes the total payout to Rs 17 per share. Its also approved a stock split of each existing share of Rs 10 into two shares of Rs 5 each.

The company attributed the fall in profits to pricing pressures in the US, its largest market, and the discontinuation of the sale of its generic quinapril to Teva following a court judgment.

As a result, Ranbaxy's US sales fell by to $80 million in January-March 2005 from $105 million in the same quarter last year.

In India, Ranbaxy lost sales mainly because of large scale destocking by chemists in preparation for the VAT regime and the removal of psychotropic drugs from the market.

Consequently, sales fell $11 million from $50 million in Q12004 to $39 million in 2005.

Ranbaxy's Europe sales also softened from $49 million in January-March 2004 to $44 million in the first quarter of 2005. According to tempest, this was because Ranbaxy had launched many more products in the first quarter of the previous year.

Overall, Ranbaxy's consolidate sales fell 13 per cent from Rs 1,307.9 crore ($290 million) in Q12004 to Rs 1,138.3 crore ($261 million) in Q12005.

In spite of the fall in sales as well as profits, Tempest reiterated the guidance given at the beginning of the year that it would record sales growth in "low teens" during 2005. "The second half will be stronger than the first half," he said.

In the US, Ranbaxy has lodged an appeal against the ban on its sale of quinapril to Teva. "The matter will be in the courts in the first week of August. We are quite confident of our appeal," he said.