Wockhardt's Q2 profit dives, hit by US and UK export curbs

Reuters

* Q2 net profit 1.4 bln rupees vs 4.5 bln year ago

* Three India plants face export restrictions

MUMBAI, Oct 25 (Reuters) - India's Wockhardt Ltd posted its smallest profit in six quarters, hurt by curbs onshipping medicines to the United States and Britain from one ofits factories after their health regulators identifieddeficiencies at the plant.

Indian medicine makers, which produce nearly 40 percent ofgeneric and over-the-counter drugs for the United States, haverecently been battered by a rash of regulatory rebukes includinga record fine for Ranbaxy Laboratories Ltd.

Wockhardt has said a U.S. import alert, reported in May,could cost it about $100 million in annual sales. It hassubsequently taken measures to improve quality oversight at itsfactories, including the appointment of a new quality chief andhiring of outside consultants.

It posted a net profit of 1.4 billion rupees ($23 million)for the three months ended Sept. 30, compared with 4.5 billionrupees a year ago. Revenues fell 11 percent to 12 billionrupees, the company said in a statement on Friday.

The average estimate for the company's net profit was 2.4billion rupees, according to a Reuters poll of two brokerages.

Earlier this month, the UK Medicines and Healthcare ProductsRegulatory Agency hit the company with restrictions on exportsfrom two other factories, highlighting the struggle Wockhardtand other Indian drugmakers face in complying with foreignregulatory norms.

"The financial results are not something the market islooking at. The market is more focused and concerned about theregulatory actions," said Jagannadham Thunuguntla, head ofresearch at SMC Global Securities.

"It's not a question of a project or contract loss, but it'sa question of credibility now."

The fresh export curbs are expected to weigh further onWockhardt's future results, and analysts at Macquarie anticipatethat resolution of the regulatory hurdles is unlikely beforefiscal year 2016.

The United States and Europe accounted for three-quarters ofthe company's revenues in the last fiscal year.

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