India, South Africa sales boost Ranbaxy’s Q2 earnings for 2009

Daiichi-controlled Ranbaxy Laboratories Ltd has posted a third-quarter profit before tax at USD 33 Mn (Rs. 1,601 Mn) with an EBITDA margin of 13% to sales for the quarter ending on September 30, boosted by eranings fro emerging market sales including India and South Africa.

Net income was 1.17 billion rupees ($25 million) compared with a year-earlier loss of 3.95 billion rupees.

Sales in India, South Africa and other emerging markets contributed for 62 percent of Ranbaxy’s revenue.

Developed markets de-grew by 30%, primarily on account of loss of sales in USA because of the import alert and Application Integrity Policy imposed by the USFDA.

North American region recorded sales of USD 61 Mn (Rs. 2,955 Mn) during the quarter, a de-growth of 43%.

In USA, sales during the quarter were USD 44 Mn (Rs. 2,138 Mn), a de-growth of 53% over Q3’08. This was primarily on account of ongoing USFDA issues and the discontinuation of oOmeprazole authorized generic.

Ranbaxy received final approval for glycopyrrolate and sumatriptan tablets 25/50mg. Ranbaxy also launched the authorized generic for Validus’ Rocaltrol.

Sales in Canada grew by 14% to USD 16.9 Mn (Rs. 817 Mn) during the quarter. Ranbaxy launched ropinirole and received approval for amlodipine. On MAT Aug’09 basis, the Company commands 19% share of the represented market and is ranked 7th in the generic segment.

Europe (including Romania) recorded sales of USD 67 Mn (Rs. 3,265 Mn), a de-growth of 10%. Excluding Romania, the de-growth was 2%. However, compared with the trailing quarter (Q2’09), sales grew 5% despite an intensely competitive business environment in Western Europe.

Ranbaxy maintained its Number 1 ranking in Romania,in the generics+OTC segment with a market share of 12.9% (MAT Aug’09). During the period, Evista, an osteoporosis drug from Daiichi Sankyo, was introduced by Ranbaxy in the Romanian market.

However, sales for the quarter at USD 17 Mn (Rs. 838 Mn) were down 25% due to disruption in trade arising out of (i) new pricing regulations that affected the generics industry, and (ii) severe liquidity crunch in the trade channels. Ranbaxy continued its prudent credit management policy to minimize the impact of the liquidity crunch.

Asia, Middle East and CIS region recorded sales of USD 131 Mn (Rs. 6,346 Mn) 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.

Ranbaxy’s sales in India (excluding Consumer Healthcare business) grew by 2% to Rs. 3,617 Mn (USD 74.7 Mn) during the quarter and 11% on YTD Sep’09 basis. Overall, the Company maintained its 2nd rank in the Indian Pharmaceutical market with a market share of 4.9% (MAT Aug’09). Branded business in India grew 16.2% vs. market growth of 14.6% on QTD Aug’09 basis.

Sales in CIS region recorded USD 23 Mn (Rs. 1,119 Mn) during the quarter, lower by 14%. Russia maintained similar level of sales with 1% growth. Ukraine recorded a 39% 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 USD 26 Mn (Rs. 1,275 Mn) during the quarter, a growth of 7%. A similar positive trend was visible in multiple markets.

Middle East sales grew by 18% during the quarter.

Ranbaxy’s sales in Africa during the quarter grew by 16% to USD 36 Mn (Rs. 1,758 Mn).

Ranbaxy’s South African sales touched USD 22 Mn (Rs. 1,082 Mn), a growth of 34%. On YTD Sep’09 basis, sales grew by 55%. In South Africa, Ranbaxy now commands an 8.7% market share in the represented market (MAT Aug’09) and is ranked 5th in the generic segment.

Despite tight liquidity, forex controls and high interest rates, Ranbaxy managed to garner a similar level of sales as Q3’08 at USD 5.6 Mn (Rs. 270 Mn) in Nigeria.

The Latin America region recorded sales of USD 21 Mn (Rs. 1,038 Mn) during the quarter, similar to Q3’08.

Sales in Brazil at USD 14 Mn (Rs. 679 Mn), were at the same level as Q3’08. Excluding tender business, sales grew 50%. At market level, growth was 23% (MAT Aug’09). In Brazil, Ranbaxy commands a 4% market share (MAT Aug’09) and is the 6th largest generic player.

Ranbaxy set up a new marketing division to focus on Daiichi Sankyo’s products in Mexico. Sales were up by 38% in the quarter.

Ranbaxy’s global consumer healthcare business recorded sales of USD 12 Mn (Rs. 563 Mn) during the quarter, a growth of 24%. The Company commands 10.6% share (MAT Aug’09) of the represented market in India and was ranked 2nd in the corresponding segment during the same period. All key brands witnessed strong sales growth. Flagship brands Revital and Volini further increased their market share to 88.1% and 34% respectively. A strong brand, Revital is ranked 13th in the Indian Pharmaceutical market (MAT Aug’09).

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.