Ranbaxy suffers huge net losses in fourth quarter earnings; sees $150m more loss in 2009

India’s no.1 drug maker by sales Ranbaxy Laboratories Ltd reported net loss of 7.78 billion rupees ($156 million) in its fiscal first quarter ended March 2009, compared with a profit of 1.03 billion rupees in the year-ago quarter.

Ranbaxy Laboratories Ltd also said it anticipates a loss of $150 million on sales of $1.4 billion in the year ending December 2009.

Ranbaxy, in which Japan’s Daiichi Sankyo owns about 64 percent, posted losses because of wrong-way bets on foreign- currency hedges as the Indian rupee weakened against the dollar for the fifth straight quarter.

Ranbaxy’s sales in the US, the world’s largest drug market, also dropped 14 percent. The U.S. Food and Drug Administration, on 16 Sept. 2009, blocked the import of more than 30 generic manufactured from Ranbaxy’s Paonta Sahib plant in India. The USFDA also halted reviews of drug applications from it, accusing it of falsifying test results submitted in approved and pending drug applications.

In January 2009, Ranbaxy’s chairman Malvinder Singh is reportedly said the company may shift some generic drug production to the U.S. from India or buy factories approved by the FDA in response to the US import ban.

Ranbaxy’s sales in North America, which accounts for about 27 percent of Ranbaxy’s revenue, fell 7 percent to 4.04 billion rupees in the fourth quarter of financial year 2008-2009. Sales in the U.S. declined to 3.4 billion rupees. Ranbaxy also said sales dropped 14 percent in Europe, and gained 9 percent in India.

Ranbaxy reported 9.19 billion rupees as losses on foreign-currency options before tax. The company also wrote down the value of convertible bonds due 2011 as the Indian currency weakened 3.9 percent against the dollar in the three- month period, its fifth straight quarterly decline.