Wockhardt bleeds due to Rs 284-crore hit

Last Updated: Sat, Oct 31, 2009 18:40 hrs

A mark-to-market (MTM) loss of Rs 284.4 crore caused drug major Wockhardt to post a net loss of Rs 54 crore in the third quarter ended September as against a net profit of Rs 62.2 crore in the corresponding quarter of last year. Consolidated sales revenues stood at Rs 922.7 crore, a growth 2.23 per cent over the Rs 902.5 crore posted in the year-ago period. The MTM loss has been accounted for as an exceptional item and negotiations are in progress in respect of hedging instruments outstanding.

Wockhardt said exceptional item losses were only Rs 137.6 crore as the company had accounted for the Rs 135.5 crore realised from sale of its animal health division to Vetoquinol, a French veterinary care company. Wockhardt said its outstanding liabilities were being restructured under the corporate debt restructuring (CDR) scheme, which comprehensively covers crystallised derivative and hedging liabilities.

The company’s liabilities were about Rs 3,400 crore when it was referred to the CDR cell. It had to sell some non-core assets like its animal health business and an overseas subsidiary as part of the CDR scheme.

In respect of unilaterally terminated contracts that were disputed (about Rs 450-500 crore, according to Chairman Khorakiwala), the amount payable was presently not ascertainable and hence not provided in the results, said the company.

A Wockhardt press release said the India branded business grew 9 per cent to move to the 14th position in the domestic market. Five new products were launched during this period and overall nine brands featured among the "Top 300" brands.

In Europe, Wockhardt’s UK business grew 17 per cent compared to the industry growth of only 4.5 per cent in the third quarter. Hospital products in the UK grew 13 per cent, pharmacy products grew 16 per cent and exports from the UK surged 73 per cent. Pinewood Healthcare in Ireland maintained steady sales and Negma Laboratories in France signed a co-promotion agreement for a diabetic drug and executed a contract manufacturing agreement in France.

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