Weak rupee lowers Biocon net profit 80 percent in 2008-09 (Lead)

April 28th, 2009 - 4:47 pm ICT by IANS  

Bangalore, April 28 (IANS) A steady weakening of the rupee in the volatile currency market has lowered the consolidated net profit of biotechnology major Biocon group to Rs.93.1 crore in 2008-09 from Rs.464 crore the year before, registering a whopping decline of 80 percent.
“Unpredictable rupee depreciation induced by global economic crisis has adversely impacted our consolidated earnings wherein losses of Rs.147 crore on account of mark-to-market (MTM) were provided,” Biocon chairperson Kiran Mazumdar-Shaw told reporters here Tuesday.

Excluding MTM, profit after tax is Rs.240 crore and EBITDA (earnings before interest, taxes, depreciation and amortisation) is Rs.388 crore.

Mark-to-market is value of the rupee hedged against the US dollar at a specific rate to cover risk arising out of volatile fluctuation in the currency market.

The rupee depreciated by 27.5 percent from Rs.40 to Rs.51 against the US dollar in 2008-09.

Consolidated income of the group, however, shot up to Rs.1,673 crore for the fiscal under review from Rs.1,090 crore the previous fiscal, posting 53 percent increase.

Consolidated net profit for fourth quarter (January-March) slumped to Rs.24.98 crore from Rs.65.3 crore in the like period last fiscal, a decline of 62 percent.

However, consolidated income zoomed 75 percent to Rs.487 crore from Rs.279 crore.

On standalone basis too, Biocon net profit also fell to Rs.112 crore for fiscal 2009 from Rs.435 crore, declining 74 percent, while income increased marginally 0.65 percent to Rs.987 crore from Rs.929 crore.

Similarly, for standalone Biocon, fourth quarter net profit was down to Rs.24 crore from Rs.62 crore, while income increased marginally 3 percent to Rs.240 crore from Rs.237 crore.

Operating margin was maintained at 31 percent, while research and development (R&D) expenditure went up 27 percent or Rs.60 crore.

A weak rupee has also hit the blue chip’s earnings per share (EPS), which declined to Rs.4.65 per share post MTM from Rs.12 pre-MTM.

The company’s board has recommended a dividend of Rs.3 per share or 60 percent on the enlarged share capital (post-September bonus issue).

“Our future prospects are being driven by a robust R&D engine where we are making good progress both in bio-generics and novel biologics programmes. This will call for significant investments going forward, which are expected to realise significant returns over the medium to long run,” Shaw added.

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