Sun Pharma's fourth-quarter profit halves after restructuring of business

Headline results for the fourth quarter:

Revenue

70.4 billion rupees ($1 billion; forecasts of 75.4 billion rupees)

+5%

Profit

6.4 billion rupees ($92 million; forecasts of 9.5 billion rupees)

-52.6 %

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

Sun Pharma said sales for the quarter include a one-time impact of approximately 10.9 billion rupees ($157 million) related to the change in distribution of its India business. The change came after investor scrutiny led Sun Pharma to unwind a relationship with a firm owned by managing director Dilip Shanghvi.

Commenting on the financial results, Shanghvi noted that "in spite of the one-time impact for the India business, our full-year sales have grown by double digits," adding the company "[continues] to focus on executing our global specialty strategy."

Shanghvi added "Ilumya is expected to gradually gain traction in US in [fiscal 2020], while the Cequa launch is expected in the coming months." He indicated that "at the same time, we are strengthening our core operations, optimising the cost structure and enhancing our overall efficiencies."

Other results:

  • US finished dosage sales: $443 million, up 20 percent, fuelled by the "contribution from a significant business of generic supply to a customer" covering a six-month period
    • Taro Pharmaceutical sales: $180 million, up 3 percent
  • India sales: 11 billion rupees ($158 million), down 44 percent, with Sun Pharma noting that excluding the one-time impact of the distribution change, sales for the domestic business were up 11 percent to 21.9 billion rupees ($315 million)
  • Emerging markets sales: $173 million, up 13 percent
  • Rest of world sales: $153 million, up 32 percent
  • Active pharmaceutical ingredient sales: 4.8 billion rupees ($69 million), up 46 percent
  • Full-year revenue: 286.9 billion rupees ($4.1 billion), up 10 percent
  • Full-year profit: 26.7 billion rupees ($384 million), versus  21.6 billion rupees ($318.7 million)  

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