Oxygenta Pharmaceutical (524636) Q4 05/06 earnings summary

Executive summary

• FY06 net loss after tax was Rs 25.34m, compared with profit of Rs 6.33m in the prior 18-month period; factory closure, litigation, higher input costs and low yields weighed on results.

• Net sales after excise duty were Rs 141.65m; management reported turnover of Rs 162.36m and cited a three-month factory closure during the year.

Financial highlights

• Total income was Rs 202.16m vs Rs 272.46m in the prior 18-month period; profit before tax was a loss of Rs 18.89m vs profit of Rs 9.67m.

• Net loss after tax was Rs 25.34m, including deferred tax expense of Rs 6.24m and fringe benefit tax of Rs 0.21m; prior-period adjustments were Rs 1.05m.

• Financial expenses fell to Rs 1.03m from Rs 4.14m; Rs 1.22m of IDBI interest was written off under an OTS package in the prior period.

• Raw material consumption was Rs 134.90m vs Rs 152.64m; salaries, wages and employee benefits were Rs 17.46m vs Rs 22.50m.

Outlook and guidance

• Management expected performance to improve once the April 2006 factory closure issue was resolved and operations could proceed without hindrance or litigation.

• Management saw opportunities in the buoyant domestic and international pharmaceutical markets, conditional on smooth operations.