Merck Ltd, which manufactures both pharmaceuticals and chemicals, had a dismal performance during the third quarter ended September, 2002.While the net sales of the company showed a fall of 5.4 per cent at Rs 89.36 crore, the profit before tax eroded 16.7 per cent at Rs 16.34 crore. As a result of an increase in effective rate of taxation from 26 per cent to 33.6 per cent, the net profit dipped by 25.3 per cent to Rs 10.85 crore. There has been a reduction of 15 per cent in interest charges from Rs 0.13 crore to Rs 0.11 crore during Q3. The operating margin was also estimated lower at 21.2 per cent compared to 23.5 per cent in the corresponding quarter of previous year.
During the nine months ended 2002, the company achieved a turnover of Rs 264.38 crore which showed a rise of 3.9 per cent over Rs 254.47 crore during the same period of previous year. Despite a sharp reduction in interest charges, the profit before tax tumbled by 8.2 per cent to Rs 43.11 crore. This was mainly due to rapid increase in cost of production coupled with lower efficiency of working. The operating margin stood lower at 19.2 per cent as compared to 21.4 per cent. The net profit of the company declined sharply by 13 per cent to Rs 29.28 crore mainly due to steeper increase in tax rate form 28.4 per cent to 32.1 per cent.
The company's pharmaceutical business includes ethical use for the treatment of cardiovascular, metabolic diseases and vitamins while chemical business includes analytic and reagents, life science products and pigment. Dr.H.Mauer was appointed as the new managing director of the company from July 2002 while Dr. J. Sambroek was appointed as the director.