The Hindu Business Line : Wockhardt posts full-year net loss of Rs 139 cr

Mumbai, April 25 Mark-to-market (MTM) and derivative losses totalling Rs 581 crore pushed Wockhardt Ltd to post a net loss of Rs 139 crore for its financial year ended December 31, 2008.

MTM losses amounted to Rs 459 crore, and derivative losses Rs 122 crore. There is also a claim of Rs 489 crore on the company by banks which the company intends to dispute.

“Some banks, based on the early termination clause in the agreement had terminated certain forex contracts and claimed an amount of Rs 489 crore,” Wockhardt said in a statement after its delayed board-meeting on Friday.

“The board is of the view that the forex transactions were unilaterally cancelled by banks and the mark-to-market losses had arisen on account of counter positions advised by the banks.

“The company has obtained a legal opinion that these contracts can be disputed, and accordingly no provision for the same has been made,” the note said.

“We have had an exceptional year in all ways, both in terms of sales revenues and operating profits. Our acquisitions have started paying-off and have posted double-digit growth in their markets.

With 73 per cent of our turnover coming from our international operations, in the normal course of the business, it was prudent to hedge our foreign exchange exposure.

But due to the meltdown in the global markets and the consequent currency volatility, we had to make provisions for MTM losses, which had a marked impact on our bottomline,” the statement said, quoting the Wockhardt Chairman, Mr Habil Khorakiwala.

Sales, operating profit

Wockhardt’s sales revenues for the year grew by 35.4 per cent to Rs 3,593 crore and operating profit was up by 26.5 per cent to Rs 808 crore.

Wockhardt’s international business grew 40.3 per cent, the note said.

“Wockhardt has applied to its lending banks for Corporate Debt Restructuring (CDR) and the same has been admitted.

“The passage of this in the coming few months will ensure enough liquidity for operations and mitigate most of our current issues, which in turn will facilitate our planned growth and benefit all our stakeholders,” the statement said.

For the fourth quarter ended December 2008, Wockhardt’s net loss was Rs 358 crore. Sales grew at 24.9 per cent to Rs 952 crore and operating margin at 20.6 per cent to Rs 196 crore, the note said.

Q1 2009

Wockhardt also announced a 10.7 per cent increase in consolidated sales revenues, at Rs 869 crore for the first quarter ended March 31, 2009, over the corresponding quarter of 2008.

Net loss stood at Rs 20 crore and MTM losses stood at 32 crore, the note said.

“We are taking significant management initiatives towards containing these MTM losses during the current financial year,” the statement quoting the Chairman said.

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