Wockhardt posts Rs 155 crore net loss in Q4, hit by GST woes and remedial costs

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Gwendolyn 1 2021-05-06

Moneycontrol News

Drug maker Wockhardt on Friday posted a loss of Rs 155 crore in the fourth quarter on account of reclassification of taxes post GST implementation in India apart from subdued business sentiment.

The company posted Rs 175 crore net loss during the same period of previous year while sales rose 17.8 percent to Rs 1018 crore.

For the full year ended March, Wockhardt widened its net loss to Rs 608 crore and revenues declined 2 percent to Rs 3,937 crore.

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「While the company’s focus on cost containment and rationalisation continues to deliver its intended positive impact on profitability, cost of on-going remedial measures, volatility in various currencies like GBP, EURO and USD had impacted the business,」 Wockhardt said in a statement to stock exchanges.

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「Also, focus in strategic R&D initiatives of the Company in the global arena continued to impact the profitability. However, it would be noteworthy to mention that such strategic R&D expenses are for the future, inspite of the fact that they are expensed off,」 it said.

Wockhardt has been grappling with quality control issues raised by the US Food and Drug Administration (FDA) for the past four years.

Its formulations units at Chikalthana and Waluj in Maharashtra have been under the FDA’s import alert since 2013 for violations of manufacturing standards.

A bulk drug plant at Ankleshwar in Gujarat was issued an import alert in August 2016.

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Wockhardt’s so-called step-down unit in the US, Morton Grove Pharmaceuticals Inc., received a warning letter in March last year and its indirect subsidiary in the UK, CP Pharmaceuticals, received a warning letter for its Wrexham facility in November.

The company’s business in the UK that accounts 37 percent of sales grew 24, while the US business that contributes around 17 percent grew at 13 percent due to new product launches in that market.

Sales in the domestic market declined 1 percent. India accounts around 36 percent of Wockhardt.

Wockhardt’s spending on research and development (R&D) was at Rs77 crore in the March quarter, accounting for 8 percent of sales.

The company said its Board has approved raising Rs 1500 crore of additional capital by way of one or more public or private offerings including through a Qualified Institutions Placement (QIP). The Board also approved issuance of Non-Convertible Debentures (NCDs) on a private placement basis upto an amount not exceeding Rs.1,200 crore.

The company said NCD proceeds shall be utilised to repayment existing debts and general corporate purposes.

The results were announced after market hours.

Shares of Wockhardt on Friday dropped 1.65 percent to close at Rs 802.85 on BSE, the benchmark Sensex declined 0.53 percent to end 34,915.38 points.