Drug manufacturer Sigma Pharmaceuticals Ltd (ASX: SIP) said on Wednesday that it has absorbed a $220 million non-cash impairment that led to a whopping half year net decline of 780 percent to $218.527 million as compared to the $32.217 million of profit that the company achieved in the previous half year.

The drug company said that its revenue results from the year leading to June 31 jumped by 6.5 percent at $16394 billion while its earnings before interest and tax (EBIT) further slumped by 335 percent at a loss of $180.2 million and leading to no issuance of interim divided for the period following the three cents per share, fully franked, distributed in fiscal 2010's first half.

Sigma said that it is expecting that earnings would detract from its previous guidance in view of the impairment charge, one off expenses in the current half year and its ceased operations due to the possible acquisition overtures by Aspen.

It said that underlying EBIT of up to $150 million could be achieved by end of January 2011 though it would hinge on the Aspen deal and the business' continued normal operation as the company added that apart from the $220 million non-cash impairment, another one-off charge of $24.7 million was registered in the first half of fiscal 2011.

Sigma also reported that it has been honouring all its debt covenants as the company lenders agreed to some one-off adjustments following due discussion at the end of the financial year.

Company managing director Mark Hooper said that challenges may have marred most of the six-month span of the new results but he pointed to the emerging signs of stability creeping back in the business.

Mr Hooper said that improved sales were seen in the Healthcare and Pharmaceutical divisions of the company as he stressed that such growths were achieved "in an environment of highly competitive generic pricing and lower promotional sales in this half year."

Sigma revealed in August that Aspen Pharmacare is taking over its pharmaceuticals division for $900 million as the company ramps up on its efforts to sustain its sales recovery and transform the encouraging figures to actual earnings for the upcoming result cycle.