Ranbaxy reports flat earnings in Q2, outlook positive

The company's consolidated net profit in Q2 of 2008 stood at Rs.160.80 crore, up from Rs.160.40 crore posted in Q2 of 2007 (year-on-year or YoY rise of 0.24 percent).

During the same period, the company's sales rose from Rs.1623.80 crore to Rs.1829.60 crore (YoY rise of 12.67 percent).

The company, however, said the figures do not include foreign exchange loss and gains. Taking foreign exchange loss into consideration, the reported net profit stood at Rs.22.90 crore, hurt by a foreign-exchange loss of Rs.193 crore as against a net profit of Rs.266 crore in Q2 of 2007, which included a foreign-exchange gain of Rs.201 crore.

Regionwise, Ranbaxy saw its sales surge 18 percent, 3 percent, 4 percent, 20 percent and 11 percent in North America, India, Europe, Asia Pacific & CIS (excluding India), and Rest of the World respectively.

Emerging markets contributed 53 percent of global sales and grew 9 percent. Key countries in Latin America, Asia Pacific and Africa contributed to the growth in emerging markets, the company said.

Despite underperforming during the quarter, the company remains upbeat in its outlook. "Most striking has been our path-breaking deal with Daiichi Sankyo which I believe will substantially alter the rules of the game and re-define the global pharmaceutical landscape," said Malvinder Mohan Singh, managing director and CEO, Ranbaxy.

"We have the early mover advantage and are best placed to gain from the complementary strengths of both partners in capitalizing on the opportunities available across the entire pharmaceutical value spectrum. We expect performance to be stronger as we move through the rest of the year," Singh said.

In June, Ranbaxy said it has struck a binding agreement with Japanese drug maker Daiichi Sankyo pursuant to which Daiichi would acquire Ranbaxy's majority stake for around $4.6 billion (£2.3 billion).

During the quarter, the company said it struck a significant deal with Pfizer Inc. to settle most of the patent litigation worldwide, involving Atorvastatin (Lipitor), the world's most-prescribed cholesterol-lowering medicine.