Drug maker, Dr Reddy's Labs has posted a consolidated net loss of Rs522 crore in the quarter ending December 2009 on a writedown of intangible assets and goodwill in its German arm, Betapharm. The Hyderabad-based company had reported a net profit of Rs245 crore in the corresponding quarter last year. Income during the quarter also fell 6 per cent, to Rs1,730 crore from Rs 1,840 crore last year.
Its standalone performance for the quarter on a net profit of Rs168 crore, was 60 per cent higher than the Rs104 crore in the comparable quarter last year.
Had it not been for an extraordinary write-off, Dr Reddy's Laboratories' (DRL) December quarter results would have beaten market expectations. However, the Rs860 crore, one-time write-off of goodwill of the company's German subsidiary, Betapharm, has severely impacted its consolidated earnings.
According to analysts, in line with global financial reporting standards, the company has reported a consolidated loss of Rs521.7 crore against a profit of Rs244.5 crore during the same quarter last year. However, excluding the one-time loss, DRL has fared way above market expectations.
The company registered a net loss of Rs233 crore in the quarter ended 31December, 2009, against a profit of Rs159 crore in the same period last year, on a consolidated basis. The company's total income fell to Rs1,767 crore in the quarter under review from Rs1,855.28 crore during the corresponding period last year. Net sales also were down to Rs1,730 crore from Rs1,840 crore.
Net profit adjusted for impairment was Rs230.7 crore. Profit margins improved markedly. The company enjoyed an exclusivity period for its generic Sumatriptan during the December quarter last year which led to a high base year effect this December quarter and with Rs1,730 crore, net revenues were down by 6 per cent against market estimates of a 10 per cent drop.