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Ranbaxy's Q2 net spurts 190 pc — 3:5 bonus issue announced

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NEW DELHI, July 18

PHARMA major Ranbaxy Laboratories Ltd (RLL) has posted a net profit of Rs 138.4 crore for the second quarter ended June 30, 2002. This was up 190 per cent over the previous year's net profit of Rs 47.8 crore, the company announced here on Thursday after its board meeting.

The board also declared a 3:5 bonus issue, subject to requisite approvals. The bonus issue would also seek shareholders' approval at an EGM, RLL's CEO and MD, Mr D.S. Brar, told newspersons at a teleconference.

The paid-up capital, currently at Rs 115.9 crore, would be Rs 185.4 crore, post-bonus.

RLL recorded a sales of Rs 714.4 crore, up 43 per cent over the previous year's second quarter sales of Rs 499.3 crore. Domestic sales for the quarter, remained almost at par, at Rs 264.5 crore (Rs 263.3 crore).

Export sales, at Rs 449.9 crore, were up 91 per cent over the corresponding year's second quarter figures of Rs 236 crore. R&D expenditure, including regulatory expenditure for the quarter, was Rs 36.5 crore (Rs 17.5 crore).

Consolidated sales of the company and its subsidiaries for the second quarter were Rs 946.4 crore. It was Rs 1,704.9 crore for the half-year ended June 30, 2002. PAT (profit after tax) for the second quarter was Rs 170.9 crore and first half was Rs 268.7 crore.

Mr Brar said that the sales growth for the quarter was led by buoyant exports of dosage forms and formulations across all countries. Domestic sales had out-performed the average market growth rate for the last eight months. Other highlights included: an income from Lilly in first half's profit, after the two companies parted ways. Profits for the second quarter included licensing fee of $6.3 million from Germany-based Schwarz Pharma, for RLL's prostrate drug. On the restructuring exercise undertaken by the company, he said that it was not so much a cost-saving measure, as it was to increase productivity in targeted segments.

The exercise involved improved efficiencies and product realisation.

Dr Brian Tempest, RLL's President & Director, added that low volume drugs had been identified and they would be pruned as part of the restructuring.

Happy with the company's global businesses, Mr Brar said that they were "examining the logistics, import tariffs" and other issues related to setting up a plant in Brazil.

However, he said that there was "no news" on RLL's UK subsidiary that had hit headlines for the wrong reasons.

On RLL's China subsidiary, Dr Tempest said that "results were not that sparkling" as its operations had been hurt by the price cuts in the market.

However, he added that they were revamping to a safer product line, with drugs where RLL would be the only supplier in the market.

Generic boost in US market

The 185 per cent growth in the US market in H1 was partly scripted by Cefuroxime Axetil tablets, launched in March 2002. According to Mr Brar, the product had garnered a market share in excess of 50 per cent of the prescription market, in each of the month's since launch. Other generic products also grew by 95 per cent, he said.

Responding to whether the IPR-spat with GlaxoSmithKline, the original patent-holder of the drug, had been put to rest - Dr Tempest said that the variant was launched after the US Appeals Court vacated the interim injunction filed by GSK.

Locked in a legal battle with GSK on Augmentin too, Mr Brar, was, however, unwilling to comment on whether Ranbaxy's generic version would hit the markets before the legal outcome. "We are preparing to get the approvals," he said.

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