Ranbaxy Laboratories has improved its bottom line during the third quarter ended September 2009 despite fall in sales by 18 per cent. It earned a consolidated net profit of Rs 117 crore as against a net loss of Rs 395 crore during the corresponding period of last year. It’s consolidated net sales declined by 18 per cent to Rs 1,721 crore from Rs 1,888 crore.
Its standalone net sales, however, improved by 19.3 per cent to Rs 1,352 crore to Rs 1,133 crore in the corresponding period of last year. Trend in improvement of financial performance was aided by continued cost containment measures undertaken. The company returned to double-digit EBITDA margin, for the first time since Q2 ’08.
Commenting on the business results for the quarter, Atul Sobti, CEO and managing director, said, “We are pleased with the consistent quarter-on-quarter improvement in financial performance this year, in spite of continuing challenges in some key markets. Revenue growth in some strategic geographical markets and a sharp focus on cost efficiency has been the underlying themes this quarter. With good achievements on these fronts, we are confident that we are on the path to recovery. We are also seeing greater traction in realizing synergies with Daiichi Sankyo, in building a stronger future for Ranbaxy.”
Sales in developed markets were at Rs 526 crore, lower by 30 per cent over similar quarter of 2008, primarily on account of lower sales in USA. Sales in emerging markets remained at same level of last period at Rs 1,068 crore, accounted for 62 per cent of revenues. The company has entered into an agreement with Validus Pharmaceuticals, to market and distribute an authorized generic version of Rocaltrol in USA. In India, Ranbaxy launched a protein supplement, ‘Revitalite’, marking its entry into the lucrative protein supplements market. Extracting synergies from the hybrid business model of Ranbaxy and Daiichi Sankyo, the company launched Evista in Romania, an osteoporosis drug from Daiichi Sankyo. In Mexico, the company has set-up a new division to specifically market Daiichi Sankyo products.
Developed markets de-grew by 30 per cent, primarily on account of loss of sales in USA because of the Import Alert and Application Integrity Policy imposed by the US FDA. The North America region recorded sales of Rs 296 crore during the quarter, a de-growth of 43 per cent. In USA, sales during the quarter were Rs 214 crore, a de-growth of 53 per cent over Q3’08. This was primarily on account of ongoing US FDA issues and the discontinuation of Omeprazole authorized generic. The company received final approval for Glycopyrrolate and Sumatriptan tablets 25/50mg.
Canada continued to demonstrate robust growth and its sales grew by 14 per cent to Rs 82 crore during the quarter. The company launched Ropinirole and received approval for Amlodipine. Europe (including Romania) recorded sales of Rs 327 crore, a de-growth of 10 per cent. Excluding Romania, the de-growth was 2 per cent. However, compared with the trailing quarter (Q2’ 09), sales grew 5 per cent despite an intensely competitive business environment in Western Europe.
Ranbaxy entered into a strategic in-licensing agreement with Medy-Tox Inc., South Korea, to import and market its product, Neuronox (purified Botulinum Toxin Type-A), in India. The company made its first US FDA filing from its new facility located at its SEZ in Mohali. Ranbaxy continues to cooperate with US FDA towards early resolution of observations made by that regulator. Due to marginal movement of the US Dollar during the quarter, there was no significant forex impact on its results for the quarter.
Asia, Middle East and CIS region recorded sales of Rs 635 crore during the quarter, almost at similar levels as Q3’08. India, Malaysia, and Middle East registered growth during the quarter. Liquidity crunch and softer demand being experienced in several countries especially CIS, put downward pressure sales. The region is already under pressure due to steep currency depreciation. Sales in India (excluding Consumer Healthcare business) grew by 2 per cent to Rs 362 crore during the quarter.
The CIS region recorded sales of Rs 112 crore during the quarter, lower by 14 per cent. Russia maintained similar level of sales with one per cent growth. Ukraine recorded a 39 per cent de-growth. Sales in the region were under pressure primarily on account of channel de-stocking, credit crunch, government policies on trade margins, price revisions, and seasonal slackness. The Asia Pacific region recorded sales of Rs 128 crore during the quarter, a growth of 7 per cent. A similar positive trend was visible in multiple markets.
Ranbaxy made 72 product filings worldwide and received 177 approvals during the quarter. This takes the total number of filings to 244 with 310 approvals during the year.