Revenues at Rs. 18,189 million, up by 21%
EBITDA at Rs. 4,364 million, up by 90%
PAT at Rs. 2,445 million, up by 120%
Dr. Reddy’s Laboratories Ltd. (NYSE:RDY) today announced its unaudited
financial results for the first quarter ended June 30, 2009 under
International Financial Reporting Standards (IFRS).
Q1 FY10 Key Highlights
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All figures in millions, except EPS
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All dollar figures based on convenience translation rate of
1USD = Rs 47.74
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Dr. Reddy’s Laboratories Limited and Subsidiaries
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Unaudited Condensed Consolidated Income Statement
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Q1 FY10
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Q1 FY09
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Particulars
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Index
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($)
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(Rs.)
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%
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($)
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(Rs.)
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%
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Growth %
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Revenue
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A
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381
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18,189
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100
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315
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15,038
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100
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21
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Cost of revenues
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B
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168
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8,017
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44
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158
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7,544
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50
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6
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Gross profit
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C = A-B
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213
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10,172
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56
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157
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7,494
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50
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36
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Operating Expenses
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Selling, general & administrative expenses(a)
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D
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124
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5,927
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33
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107
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5,085
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34
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17
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Research and development expenses, net
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E
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21
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985
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5
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22
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1,050
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7
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(6)
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Write down of intangible assets
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F
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-
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-
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-
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-
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-
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-
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-
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Write down of goodwill
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G
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-
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-
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-
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-
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-
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-
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-
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Other (income)/expenses, net
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H
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(1)
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(35)
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(0)
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5
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241
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2
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-
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Total Operating Expenses
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I= D+E+F+G+H
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144
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6,877
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38
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134
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6,376
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42
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8
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Results from operating activities
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J = C-I
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69
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3,295
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18
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23
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1,118
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7
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195
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Finance income (b)
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K
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(2)
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(88)
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(0)
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(7)
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(320)
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(2)
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(73)
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Finance expenses (c)
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L
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5
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223
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1
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5
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243
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2
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(8)
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Finance expenses, net
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M = K+L
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3
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135
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1
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(2)
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(77)
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(1)
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(275)
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Share of profit/(loss) of equity accounted investees
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N
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0
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11
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0
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-
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-
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-
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-
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Profit before income tax
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O = J-M+N
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66
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3,171
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17
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25
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1,195
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8
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165
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Income tax expense
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P
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(15)
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(726)
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(4)
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(2)
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(84)
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(1)
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764
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Profit for the period
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Q = O+P
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51
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2,445
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13
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23
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1,111
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7
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120
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Attributable to :
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Equity holders of the company
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R
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51
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2,445
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13
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23
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1,111
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7
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120
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Minority interest
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S
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-
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-
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-
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-
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-
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-
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-
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Profit for the period
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T = R+S
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51
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2,445
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13
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23
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1,111
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7
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120
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Weighted average no. of shares o/s
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U
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168.9
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168.9
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Diluted EPS
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V = R/U
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0.3
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14.5
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0.1
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6.6
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Notes:
(a) Includes amortization charges of Rs. 507 million in Q1 FY10 and Rs.
377 million in Q1 FY09.
(b) Includes forex gain of Rs. 176 million in Q1 FY09.
(c) Includes forex loss of Rs. 84 million in Q1 FY10.
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Key Balance Sheet Items
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(in millions)
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Particulars
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As on 30th June 09
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As on 31st Mar 09
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($)
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(Rs.)
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($)
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(Rs.)
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Cash and cash equivalents
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130
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6,184
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117
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5,596
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Trade and other receivables
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280
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13,374
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306
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14,592
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Inventories
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292
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13,933
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277
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13,226
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Property, plant and equipment
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439
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20,970
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437
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20,882
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Goodwill and Other Intangible assets
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456
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21,768
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465
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22,179
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Loans and borrowings (current & non current)
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337
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16,108
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413
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19,701
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Trade accounts payable
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144
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6,873
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125
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5,987
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Equity (including reserves)
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939
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44,832
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881
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42,045
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Business Highlights
Segmental Analysis
Global Generics
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Revenues from Global Generics business at Rs. 13.0 billion ($273
million) in Q1 FY10 as against Rs. 10.3 billion ($215 million)
in Q1 FY09. YoY growth of 27% driven by sumatriptan and key markets of
North America and India.
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Revenues from North America at Rs. 6.0 billion ($126 million) in Q1
FY10 as against Rs. 2.8 billion ($59 million) in Q1 FY09.
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Excluding revenues from Sumatriptan, the growth of 42% in North
America was driven by high volume growth across existing products.
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The cumulative ANDA filings are 139. Total of 67 ANDAs pending at
the USFDA addressing innovator sales of $68 billion, of which 28
are Para IVs and 16 are FTFs.
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Revenues from Europe at Rs. 2.1 billion ($44 million) in Q1 FY10 as
against Rs. 3.0 billion ($63 million) in Q1 FY09, representing a
degrowth of 30%.
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Revenues from betapharm decrease by 36% to Rs. 1.6 billion ($34
million) in Q1 FY10 from Rs. 2.5 billion ($53 million) in Q1 FY09.
This decrease is on account of the effect of destocking in the
market.
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Supplies for AOK tender have commenced, with AOK products
witnessing significant increase in volumes, while the volumes
for non-AOK product have fallen.
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The sales force at betapharm was restructured to reduce to
approximately 50 as of June 2009 from 110 as of March 2009.
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Revenues from Rest of Europe grew by 6% to Rs. 503 million ($11
million) in Q1 FY10. The growth is largely contributed by UK with
sales of Rs. 362 million ($8 million) representing a growth of 23%.
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Revenues from Russia & Other CIS markets at Rs. 1.9 billion ($39
million) in Q1 FY10 as against Rs. 1.9 billion ($40 million) in Q1
FY09, representing a degrowth of 3%.
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Revenues in Russia remain at Rs. 1.5 billion ($32 million) in Q1
FY10 as against Rs. 1.5 billion ($31 million) in Q1 FY09; YoY
growth of 2%. However in rouble terms, the growth is at 18% YoY
and 5% sequentially.
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Despite a degrowth in volumes, the secondary sales trend for
April & May indicates a rouble growth of 46% vis-à-vis
industry’s growth of 34%.
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Revenues in Other CIS markets decrease to Rs. 342 million ($7
million) in Q1 FY10 as against Rs. 429 million ($9 million) in Q1
FY09. YoY degrowth of 20%.
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Revenues in India increase to Rs. 2.4 billion ($50 million) in Q1 FY10
from Rs. 2.2 billion ($46 million), representing a growth of 9%
largely on account of key brands, Omez, Nise, Omez-DSR and Razo.
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Sequential growth of 15% largely contributed by volume growth of
14%.
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The secondary sales trend for April & May indicate a growth of
11.4% for Dr. Reddy’s as against the industry growth of 10.4%.
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14 new products launched during the quarter.
Pharmaceutical Services and Active Ingredients
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Revenues from Pharmaceutical Services & Active Ingredients (PSAI)
increase by 6% to Rs. 4.9 billion ($102 million) in Q1 FY10 as against
Rs. 4.6 billion ($97 million) in Q1 FY09; YoY growth of 6% driven by
the regions of Europe and RoW as well as the benefit of rupee
depreciation against the dollar.
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Growth was driven by products of Gemcitabine, Montelukast,
Sumatriptan and Levetiracetam.
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The order book status of active ingredients as of June 2009 is up
by 27% from March 2009.
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During the quarter, 4 DMFs were filed globally, with 3 in Canada
and 1 in RoW. The cumulative DMF filings till date are 355.
Income Statement Highlights:
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Gross profit increase by 36% to Rs. 10.2 billion ($213 million) in Q1
FY10 as against Rs. 7.5 billion ($157 million) in Q1 FY09. Gross
profit margins on total revenues at 56% as against 50% in Q1 FY09,
largely driven by higher margins on sumatriptan.
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Selling, General & Administration (SG&A) expenses increase to Rs. 5.9
billion ($124 million) in Q1 FY10 from Rs. 5.1 billion ($107 million)
in Q1 FY09; YoY growth of 17%.
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However excluding the exit costs of sales force at betapharm
amounting to Euros 7.2 million and the costs related to closure of
the Atlanta research facility amounting to $1.5 million, the SG&A
expenses grew by 6%.
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Other operating income of Rs. 35 million in Q1 FY10 as against Other
operating expenses of Rs. 242 million in Q1 FY09. The change is on
account of :
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Provision for damages of Rs. 515 million in Q1 FY09 on account of
the German court upholding the validity of the olanzapine patent
in Germany.
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Benefit of negative goodwill of Rs. 150 million in Q1 FY09,
relating to the acquisition of facilities from Dow Pharma.
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R&D expenses remain at Rs. 985 million in Q1 FY10.
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Finance costs (net) are at Rs. 135 million in Q1 FY10 as against
Finance income (net) at Rs. 77 million in Q1 FY09. The change is
mainly on account of :
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Net forex loss of Rs. 84 million in Q1 FY10 as against net forex
gain of Rs. 176 million in Q1 FY09.
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Net interest expense of Rs. 59 million in Q1 FY10 as against Rs.
174 million in Q1 FY09.
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PAT at Rs. 2.4 billion ($51 million) in Q1 FY10 as against Rs. 1.1
billion ($23 million), representing a growth of 120%.
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PAT adjusted for exceptions is at Rs. 2.8 billion ($60 million) as
against Rs. 1.3 billion ($28 million) in Q1 FY09, representing a
growth of 116%.
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EPS of Rs. 14.4 ($0.3) in Q1 FY10 as against Rs. 6.6 ($0.1) in Q1 FY09.
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Capital expenditure for Q1 FY10 is at Rs. 692 million ($14 million).
About Dr. Reddy's
Established in 1984, Dr. Reddy's Laboratories (NYSE:RDY) is an emerging
global pharmaceutical company with proven research capabilities. The
Company is vertically integrated with a presence across the
pharmaceutical value chain. It produces finished dosage forms, active
pharmaceutical ingredients and biotechnology products and markets them
globally, with focus on India, US, Europe and Russia. The Company
conducts research in the areas of cancer, diabetes, cardiovascular,
inflammation and bacterial infection.
Disclaimer
This press release includes forward-looking statements, as defined in
the U.S. Private Securities Litigation Reform Act of 1995. We have based
these forward-looking statements on our current expectations and
projections about future events. Such statements involve known and
unknown risks, uncertainties and other factors that may cause actual
results to differ materially. Such factors include, but are not limited
to, changes in local and global economic conditions, our ability to
successfully implement our strategy, the market acceptance of and demand
for our products, our growth and expansion, technological change and our
exposure to market risks. By their nature, these expectations and
projections are only estimates and could be materially different from
actual results in the future.
Notes
1. Financial discussions are on a consolidated basis as per IFRS.
2. Detailed analysis of the financials is available on the Company’s
website at www.drreddys.com.
Dr. Reddy’s Laboratories Ltd.
Investors and Financial Analysts:
Kedar
Upadhye, +91-40-66834297
kedaru@drreddys.com
Milan
Kalawadia (North America), +1-9082034931
mkalawadia@drreddys.com
Raghavender
R, +91-40-66511529
raghavenderr@drreddys.com
Media:
M
Mythili, +91-40-66511620
mythilim@drreddys.com
Rajan
S, +91-40-66511725
rajans@drreddys.com
