Sun Pharma Q1 net loss at Rs 1,655.60 cr on one-time settlement charges

Sales in the US were at USD 282 million (over Rs 2,100 crore) for the quarter accounting for about 29 per cent of total consolidated sales, Sun Pharma said. "Taro reported settlements and loss contingencies of USD 478.9 million (Rs 3,633.33 crore), which reflect the one-time settlement charge of USD 418.9 million (Rs 3,178.14 crore) related to the global resolution of the Department of Justice investigations into the U.S. generic pharmaceutical industry," Sun Pharma said.

Sun Pharmaceutical on Friday reported a consolidated net loss of Rs 1,655.60 crore for the quarter ended June 30, as it provided for one-time settlement charges related to US Department of Justice investigations against its subsidiary Taro Pharmaceuticals. The company had posted a net profit of Rs 1,387.48 crore for the same period previous fiscal, Sun Pharma said in a BSE filing.

Consolidated revenue from operations stood at Rs 7,585.25 crore for the quarter under consideration, as against Rs 8,374.36 crore for the same period a year ago, it added. "Excluding the exceptional items of Rs 3,633 crore (and its minority interest of Rs 832 crore), adjusted net profit for Q1 FY21 was at Rs 1,146 crore with resulting net profit margin at 15.3 per cent. Reported net loss for quarter was at Rs 1,656 crore due to the exceptional items," the company said.

The Q1 performance reflects the impact of the global COVID-19 pandemic and consequent lockdown across markets and is not an indicator of the underlying strength of our business, Sun Pharma MD Dilip Shanghvi said. Despite challenging conditions, Sun Pharma has done well and has not lost market share for any of its key specialty products in the US, he added.

"We have also maintained our market share in the Indian domestic market. Our timely risk mitigation initiatives ensured smooth operations of our manufacturing network, thereby maintaining continuous supplies of drugs," Shanghvi said. Sale of branded formulations in India for Q1 FY21 was Rs 2,388 crore, up by 3 per cent over Q1 last year and accounted for 32 per cent of total sales, Sun Pharma said.

According to the  AIOCD AWACS MAT June-2020 report, Sun Pharma is ranked number 1 and holds approximately 8.2 per cent market share in the over Rs 1,42,000 crore Indian pharmaceutical market, it added. Sales in the US were at USD 282 million (over Rs 2,100 crore) for the quarter accounting for about 29 per cent of total consolidated sales, Sun Pharma said.

"Taro reported settlements and loss contingencies of USD 478.9 million (Rs 3,633.33 crore), which reflect the one-time settlement charge of USD 418.9 million (Rs 3,178.14 crore) related to the global resolution of the Department of Justice investigations into the U.S. generic pharmaceutical industry," Sun Pharma said. An additional provision of USD 60 million (Rs 455.19 crore) has been taken for the related ongoing multi-jurisdiction civil antitrust matters. The ultimate outcome of the antitrust matters cannot be predicted with certainty, it added.

"Our sales in emerging markets were at USD 173 million (over Rs 1,290 crore) for Q1, a decline of 10.5 per cent over the same quarter last year. Overall sales in emerging markets accounted for about 18 per cent of total consolidated sales for the quarter," Sun Pharma said. Formulation sales in Rest of World (ROW) markets, excluding US and emerging markets, were USD 136 million (over Rs 1,015 crore) in Q1FY21, down by 18.5 per cent over Q1 last year and accounted for approximately 14 per cent of total consolidated sales, it added.

"In Q1 FY21, external sales of API were at Rs 554 crore, a growth of 20 per cent over Q1 last year. Our API business imparts benefits of vertical integration and continuity of supply chain for our formulations business. We continue to increase the API supply for captive consumption for key products," the company said. Consolidated research and development investment for the first quarter of FY21 was Rs 421 crore, or 5.6 per cent of sales, as compared to Rs 422 crore (5.1 per cent of sales) for the same period last fiscal, it added.

Shares of Sun Pharmaceutical Industries closed at Rs 531.75 per scrip on BSE, up 4.27 per cent from its previous close..