Ranbaxy Labs on Wednesday posted a consolidated net loss of Rs 524.24 crore for the quarter ended June 30, 2013, mainly on account of foreign exchange losses and goodwill impairment in its operations in France.

The company had reported a net loss of Rs 585.72 crore for the corresponding period in the previous financial year.

Net sales was down to Rs 2,633.20 crore for the quarter ended June, as against Rs 3,204.59 crore in the corresponding period last year.ll

Ranbaxy CEO & managing director Arun Sawhney said in an analyst call on Wednesday evening that absolute sales were lower because in the corresponding quarter last year the sales included contribution from 180 days marketing exclusivity opportunities in the US market.

“With the payment of $500 million, provisioned earlier, we have settled both the civil and criminal settlements with the US Department of Justice. This should allow us to focus our resources and energies to drive future growth,” Sawhney said.

The provision for this amount, which was paid in the quarter ended June was made in the books of 2011.

The company’s CEO said in an analyst call later in the day that during the quarter, 16 national regulatory agencies have inspected various facilities of the company.

Analysts maintain that despite quarter-on-quarter improvement, single digit margin of the company remain a cause of concern.

“Although Ranbaxy has bettered its margins sequentially, from 7.6% to 9.8% in the June quarter, its performance still is way below peers like Lupin, Sun Pharma and that is worrisome,” said Ranjit Kapadia, senior vice president, Centrum Broking.

“The depreciation of the rupee against the dollar, though favourable to Ranbaxy’s export business, had an adverse impact on the current quarter profitability. This was mainly on account of application of the accounting standards that require marking to market the entire derivatives and foreign currency denominated loans outstanding,” Ranbaxy said.

There was a net charge of Rs 540 crore during the second quarter of financial year 2013 (company follows calendar year for reporting results) and Rs 495 crore during first half of 2013 on the profit and loss on account of the forex items, it added.

The macroeconomic environment continued to be challenging in certain countries in Western Europe. Specifically in France, the generic pharma industry has been impacted by continuing pricing and trade challenges, Ranbaxy said.

“The company has taken an impairment of goodwill of Rs 119.2 crore in France in line with the accounting standards,” it added.

“The company continued its focus on branded markets and business which will help navigate the growth of Ranbaxy in the coming years,” Sawhney said.

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