Alembic Ltd, a Rs 1100 crore plus Vadodara based pharma major, has suffered heavy setback during the year ended March 2009 and its net profit drifted down by 93.5 per cent to Rs 7.29 crore from Rs 112.19 crore in the previous year. Higher raw material cost, heavy foreign exchange loss and higher interest cost pulled down its profits. Further, lower profitability is attributed to investments involved in major restructuring exercise in domestic formulations business and lower realization of penicillin-G prices. The company incurred a foreign exchange loss of Rs 35.07 crore as against a gain of Rs 0.81 crore.
The company's net sales increased by 9.8 per cent to Rs 1102 crore from Rs 1003 crore in the previous year. Its domestic sales declined by 4.5 per cent to Rs 678.31 crore from Rs 710.21 crore basically due to lower sales of formulation by 7.3 per cent to Rs 554.20 crore. Its domestic sales of APIs, however, increased by 10.3 per cent to Rs 124.11 crore.
Alembic's total exports increased by 45.6 per cent to Rs 430.94 crore from Rs 296.02 crore in 2007-08. Exports to regulated markets increased by 63.4 per cent to Rs 308.85 crore from Rs 189.02 crore. Formulation exports improved to Rs 119.65 crore from Rs 116.52 crore and that of APIs went up to Rs 311.29 core from Rs 179.50 crore.
The company made provision for diminution in investment to the tune of Rs 7.52 crore in respect of a US company namely Xechem Corporation during 2008-09. In the previous year, Alembic had a non recurring income on account of profit on sale of land of Rs 22.55 crore. Further, it accounted NDDS income of Rs 8.10 crore in the previous year towards milestone payment from UCB Pharma.
The board of directors has cut down equity dividend rate to 20 per cent for the year 2008-09 from 75 per cent in last year. The company bought back 12,62,844 equity share at an average price of Rs 31.46 for a total consideration of Rs 3.97 crore which is about 12.02 per cent of the total buy-back size of Rs 33 crore. The company has extinguished these shares as at the end of 2008-09.