Dr. Reddy’s Revenues Cross $2 Billion Milestone* in FY12

FY12 Revenues at Rs. 96.7 billion, YoY growth of 30%

FY12 PAT** at Rs. 15.3 billion, YoY growth of 42%

Q4 FY12 Revenues at Rs. 26.6 billion, YoY growth of 32%

Q4 FY12 PAT** at Rs. 4.2 billion, YoY growth of 38%

HYDERABAD, India--()--Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its audited consolidated financial results for the quarter and full year ended March 31, 2012 under International Financial Reporting Standards (IFRS).

Key Highlights

  • Consolidated revenues at Rs. 96.7 billion in FY12, year-on-year growth of 30%, driven by key markets of North America and Russia in Global Generics segment and Pharmaceutical Services and Active Ingredients segment.
    • Consolidated revenues of Rs. 26.6 billion in Q4 FY12, year-on-year growth of 32%.
  • EBITDA of Rs. 25.4 billion in FY12, 26% of revenues and recorded year-on-year growth of 51%.
    • EBITDA of Rs. 6.8 billion in Q4 FY12, 26% of revenues and recorded year-on-year growth of 34%.
  • Profit after Tax** in FY12 of Rs. 15.3 billion, year-on-year growth of 42%.
    • Profit after Tax** of Rs. 4.2 billion in Q4 FY12, year-on-year growth of 38%.
  • During the year, the company launched 141 new generic products, filed 88 new product registrations and filed 68 DMFs globally.
  • The Board of Directors of the Company has proposed a dividend of Rs. 13.75 (275%) per equity share of Rs. 5/- face value, subject to the approval of shareholders.

* Revenues based on the average billed dollar rate of 47.91

** Note: PAT adjusted for a) interest on bonus debentures, b) Impairment of intangibles, and c) corresponding tax adjustment

All figures in millions, except EPS

   

All US dollar figures based on convenience translation rate of 1USD = Rs. 50.89

 
Dr. Reddy’s Laboratories Limited and Subsidiaries
Audited Consolidated Income Statement
 
Particulars FY12   FY11    
($)  

(Rs.)

  % ($)  

(Rs.)

  % Growth %
Revenue 1,901 96,737 100 1,468 74,693 100 30
Cost of revenues 853   43,432   45   677   34,430   46   26  
Gross profit 1,048   53,305   55   791   40,263   54   32  
Operating Expenses
Selling, general and administrative expenses 567 28,868 30 466 23,690 32 22
Research and development expenses 116 5,911 6 99 5,060 7 17
Write down of intangible assets 20 1,040 1 - - - -
Other operating (income) / expense (15 ) (765 ) (1 ) (22 ) (1,115 ) (1 ) (31 )
Results from operating activities 360   18,252   19   248   12,628   17   45  
Net finance (income) / expense (3 ) (160 ) (0 ) 4 188 0 (185 )
Share of (profit) / loss of equity accounted investees (1 ) (54 ) (0 ) (0 ) (3 ) (0 ) 1700  
Profit / (loss) before income tax 364   18,466   19   244   12,443   17   48  
Income tax (benefit) / expense 83   4204   4   28   1,403   2   200  
Profit / (loss) for the period 281   14,262   15   216   11,040   15   29  
                               
Diluted EPS 1.6   83.8     1.3   65.0     29  
 
 

Profit Computation:

EBITDA Computation     FY12   FY11
($)  

(Rs.)

($)  

(Rs.)

PBT 363 18,466 245 12,443
Interest 14 690 4 199
Depreciation 71 3,628 58 2,961
Amortization and Impairment 52   2,626   23   1,186  
Reported EBITDA 500   25,409   330   16,789  
Adjustments of exceptional items:
Profit on sale of land and negative goodwill -   -   (7 ) (365 )
Adjusted EBITDA 500   25,409   323   16,424  
 
                   
PAT Computation FY12 FY11
($)

(Rs.)

($)

(Rs.)

PAT 280 14,262 217 11,040
Adjustments of exceptional items:
Interest on Bonus Debentures 9 470 - -
Profit on sale of land and negative goodwill - - (7 ) (365 )
Impairment 20 1,040 - -
Tax adjustment (9 ) (466 ) 2   88  
Adjusted PAT 300   15,306   212   10,763  
 
 

Key Balance Sheet Items

   

(in millions)

Particulars     As on 31st Mar 12     As on 31st Mar 11
($)  

(Rs.)

($)  

(Rs.)

Cash, cash equivalents and other investments 357   18,152 113   5,831
Trade receivables 498   25,339 346   17,615
Inventories 380   19,352 316   16,059
Property, plant and equipment 653   33,246 582   29,642
Goodwill and Other Intangible assets 265   13,529 300   15,246
Loans and borrowings (current and non current) 633   32,210 463   23,503
Trade payables 187   9,503 167   8,480
Equity 1,129   57,443 904   45,990
 
 

FY12 Revenue Mix by Segment

 

(in millions)

      FY12   FY11   Growth %
($)  

(Rs.)

  % ($)  

(Rs.)

  %
Global Generics 1,380   70,243 73 1,048   53,340 71 32  
North America   31,889 45   18,996 36 68  
Europe   8,259 12   8,431 16 (2 )
India   12,931 18   11,690 22 11  
Russia and Other CIS   13,260 19   10,858 20 22  
RoW   3,904 6   3,366 6 16  
PSAI 468   23,812 25 386   19,648 26 21  
North America   4,272 18   3,170 16 35  
Europe   8,424 35   7,020 36 20  
India   3,586 15   2,619 13 37  
RoW   7,531 32   6,838 35 10  
Proprietary Products and Others 53   2,682 3 34   1,705 2 57  
Total 1,901   96,737 100 1,468   74,693 100 30  
 
 

Segmental Analysis

Global Generics

Revenues from Global Generics segment at Rs. 70.2 billion in FY12, year-on-year growth of 32% driven by key markets of North America and Russia.

  • Revenues from North America at Rs. 31.9 billion in FY12 grew by 62% in local currency over previous year. Revenues in Q4 FY12 at Rs. 8.7 billion represented year-on-year growth of 36% in local currency. In Q4 FY12, revenue share of olanzapine was below $2 million due to lower generic substitution and shelf stock adjustment.
    • Growth was largely driven by new product launches of ziprasidone, fondaparinux, amoxicillin clavulanic acid, products from Shreveport facility and market share expansion in existing products of lansoprazole and omeprazole Mg OTC.
    • 16 new products were launched during the year.
    • 26 products of prescription portfolio feature among the Top 3 ranks in market shares (Source: IMS Health Volumes February 2012).
    • During the year, 17 ANDAs were filed. Cumulatively 80 ANDAs are pending for approval with the USFDA of which 41 are Para IVs and 7 are with FTF status.
  • Revenues in Russia and Other CIS markets at Rs. 13.3 billion in FY12 represented year-on-year growth of 22%.
    • Revenues in Russia at Rs. 11.0 billion in FY12 represented year-on-year growth of 15% in local currency. Revenues in Q4 FY12 at Rs. 2.9 billion represented year-on-year growth of 23% in local currency.
      • Growth driven by volume increase across key brands and OTC portfolio.
      • OTC portfolio grew by 32% over previous year.
      • Based on market research, Dr. Reddy’s year-on-year rouble growth at 21% versus industry’s growth of 17%; Dr. Reddy’s is ranked 13th by market share (Source: Pharmexpert March 2012)
    • Revenues in Other CIS markets at Rs. 2.2 billion in FY12 grew by 17% over previous year.
  • Revenues in India at Rs. 12.9 billion in FY12 grew by 11% over previous year. Revenues in Q4 FY12 at Rs. 3.2 billion represented year-on-year growth of 16%.
    • Growth driven by volume increase across key brands and oncology portfolio.
    • Biosimilars portfolio grew by 33% over previous year.
    • 23 new products were launched during the year.
  • Revenues from Europe at Rs. 8.3 billion in FY12 declined by 2% over previous year.
    • Revenues from Germany at Rs. 5.1 billion in FY12 declined by 15% in local currency over previous year. This decline was largely due to the continued tenderization of the German market.

Pharmaceutical Services and Active Ingredients (PSAI)

  • Revenues from PSAI are at Rs. 23.8 billion in FY12, year-on-year growth of 21%. Revenues in Q4 FY12 at Rs. 7.5 billion represented year-on-year growth of 35%.
    • The growth in Active Ingredients business was led by sales to generic customers to support their generic product launches in line with patent expiries in the near term.
    • The growth in Pharmaceutical Services business was led by new customer orders.
    • During the year, 68 DMFs were filed globally, with 14 each in the US and Europe. The cumulative DMF filings as of 31st March 2012 are 543.

Income Statement Highlights:

  • Gross profit margin at 55% in FY12 marginally improved versus 54% in FY11. Gross profit margin for Global Generics and PSAI business segments were at 63% and 32% respectively.
  • Selling, General and Administration (SG&A) expenses including amortization at Rs. 28.9 billion increased by 22% over previous year. This increase is on account of higher manpower and distribution costs and the effect of rupee depreciation against multiple currencies.
  • In Q4 FY12, there were triggering events in the German market relating to reduction in the reference prices and additional tenders at low bid prices. As a result, a non-cash impairment charge, related to product intangibles, of Rs. 1,040 million was recorded in the books. Impairment charge after effecting the corresponding tax benefit was Rs. 730 million.
  • Net Finance income was at Rs. 160 million in FY12 versus net Finance expense of Rs. 188 million in FY11. The change is on account of:
    • Net forex gain of Rs. 689 million in FY12 versus net forex loss of Rs. 57 million in FY11.
    • Net interest expense of Rs. 690 million in FY12 versus Rs. 199 million in FY11. This increase is largely on account of the interest on bonus debentures of Rs. 470 million recorded in FY12.
    • Profit on sale of investments of Rs. 161 million in FY12 versus Rs. 68 million in FY11.
  • EBITDA of Rs. 25.4 billion in FY12, 26% of revenues and recorded year-on-year growth of 51%.
  • Profit after Tax*** in FY12 of Rs. 15.3 billion recorded year-on-year growth of 42%.
  • Earnings*** per share in FY12 were Rs. 89.9.
  • Capital expenditure in FY12 was Rs. 8.6 billion.

*** Note: Adjusted for: a) interest on bonus debentures, b) Impairment of intangibles, and c) corresponding tax adjustment

Q4 FY12 Consolidated Income Statement

   

All figures in millions, except EPS

   

All US dollar figures based on convenience translation rate of 1USD = Rs. 50.89

Particulars Q4 FY12   Q4 FY11    
($)  

(Rs.)

  %   ($)  

(Rs.)

  %   Growth %
Revenue 522 26,584 100 396 20,173 100 32
Cost of revenues 248   12,613   47   181   9,224   46   37  
Gross profit 274   13,971   53   215   10,949   54   28  
Operating Expenses
Selling, general and administrative expenses 142 7,217 27 120 6,127 30 18
Research and development expenses 34 1,741 7 29 1,491 7 17
Write down of intangible assets 20 1,040 4 - - - -
Other operating (income) / expense (4 ) (198 ) (1 ) (10 ) (512 ) (3 ) (61 )
Results from operating activities 82   4,171   16   76   3,843   19   9  
Net finance (income) / expense (2 ) (82 ) (0 ) (1 ) (74 ) (0 ) 14
Share of (profit) / loss of equity accounted investees (0 ) (12 ) (0 ) 0   4   0   -  
Profit / (loss) before income tax 84   4,265   16   77   3,913   19   9  
Income tax (benefit) / expense 16   838   3   11   567   3   48  
Profit / (loss) for the period 68   3,427   13   66   3,346   17   2  
                               
Diluted EPS 0.4   20.1     0.4   19.7     2  
 
 

Q4 FY12 Profit Computation

     

                                           (in millions)

EBITDA Computation     Q4 FY12   Q4 FY11
($)  

(Rs.)

($)  

(Rs.)

PBT 84 4,265 77 3,913
Interest 2 88 2 104
Depreciation 20 1,020 15 787

Amortization and Impairment

28   1,424   5   274  
EBITDA 134   6,797   99   5,078  
Adjustments of exceptional items:
Profit on sale of land and negative goodwill -   -   (7 ) (365 )
Adjusted EBITDA 134   6,797   92   4,713  
 
                   
PAT Computation Q4 FY12

Q4 FY11

($)

(Rs.)

($)

(Rs.)

PAT 67 3,427 66 3,346
Adjustments of exceptional items:
Interest on Bonus Debentures 2 116
Profit on sale of land and negative goodwill (7 ) (365 )
Impairment 20 1,040
Tax adjustment (7 ) (349 ) 2   88  
Adjusted PAT 82   4,234   61   3,069  

About Dr. Reddy's

Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) is an integrated global pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three business segments - Pharmaceutical Services and Active Ingredients, Global Generics and Proprietary Products – Dr. Reddy’s offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars, differentiated formulations and NCEs. Therapeutic focus is on gastro-intestinal, cardiovascular, diabetology, oncology, pain management, anti-infective and pediatrics. Focus markets include India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, Australia and New Zealand.

For more information, log on to: www.drreddys.com

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.

Note: All discussions in this release are based on audited consolidated IFRS financials.

Contacts

Dr. Reddy’s Laboratories Ltd.
Investors and Financial Analysts:
Kedar Upadhye
+91-40-66834297
kedaru@drreddys.com
or
Raghavender R
+91-40-49002135
raghavenderr@drreddys.com
or
Saunak Savla
+91-40-49002135
saunaks@drreddys.com
or
Milan Kalawadia (North America)
+1-9082034931
mkalawadia@drreddys.com
or
Media:
Rajan S
+91-40-49002445
rajans@drreddys.com

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Contacts

Dr. Reddy’s Laboratories Ltd.
Investors and Financial Analysts:
Kedar Upadhye
+91-40-66834297
kedaru@drreddys.com
or
Raghavender R
+91-40-49002135
raghavenderr@drreddys.com
or
Saunak Savla
+91-40-49002135
saunaks@drreddys.com
or
Milan Kalawadia (North America)
+1-9082034931
mkalawadia@drreddys.com
or
Media:
Rajan S
+91-40-49002445
rajans@drreddys.com