The Hindu Business Line : Wockhardt’s mark-to-market hit of Rs 28 cr takes net down 23%

Mumbai, April 28 Wockhardt Ltd has taken a mark-to-market (MTM) hit of Rs 27.9 crore, taking the company’s consolidated net profit down by 23 per cent for the first quarter ended March 31, 2008.

Consolidated net profit after the extraordinary item of the MTM loss, stood at Rs 50.9 crore for the period under review compared with Rs 66.3 crore in the corresponding period of the previous year.

Net profit without the extraordinary item stood at Rs 78.8 crore, up 18.9 per cent.

The company had entered into hedging instruments that are long-term in nature, to reduce the interest cost for the loans which the company has taken in the past and is outstanding as of March 31, 2008, a Wockhardt note said.

Under the terms of the risk management policy, the company is hedging the interest for 50 per cent of the long-term loans.

The company does not hold or issue derivative financial instruments for trading or speculative purposes, the company added.

Consolidated revenues grew by 50.3 per cent to clock Rs 785.7 crore for the first quarter ended March 31, 2008.

The operating profit grew by 49.9 per cent to Rs 173.7 crore. “The acquisition of Negma Laboratories in France and Morton Grove Pharmaceuticals in the US has shown a remarkable performance,” said the Wockhardt Chairman, Mr Habil Khorakiwala.

“This has enabled us to increase our operating profit by 50 per cent, and thus, maintain a margin of 22 per cent,” he added.

Europe market

The company said that Europe continues to be its single largest market accounting for 54 per cent of consolidated sales.

The business grew at 69 per cent, driven largely by a surge in the European formulation business and the opportunities of contract manufacturing gaining momentum.

The company’s US business grew by 141 per cent. Wockhardt markets 58 products in the US market, the note said.

Wockhardt shares were down over 2.35 per cent on the BSE, at Rs 297.40

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