Dr. Reddy's Q3 FY12 Financial Results
Highest ever quarterly sales and profit
Hyderabad, India, February 03, 2012: Dr. Reddy's Laboratories Ltd. (NYSE: RDY) today announced its unaudited consolidated financial results for the quarter ended December 31, 2011 under International Financial Reporting Standards (IFRS).
Key Highlights
•Launch of olanzapine 20 mg (generic version of Eli Lilly's Zyprexa® 20 mg) in the US, another key milestone in consistently delivering limited competition opportunities
• Revenues for Q3 FY12 at ₹ 27.7 billion ($522 million), YoY growth of 46% ◦Revenues for nine months FY12 at ₹70.2 billion ($1.3 billion), YoY growth of 29%.
- EBITDA for Q3 FY12 at ₹ 9.2 billion ($174 million), 33% to sales, YoY growth of 127%
◦EBITDA for nine months FY12 at ₹18.6 billion ($351 million), 27% to sales, YoY growth of 59%.
- Adjusted* PAT for Q3 FY12 at ₹ 5.2 billion ($98 million), YoY growth of 91%
◦Adjusted* PAT for nine months FY12 at ₹11.1 billion ($209 million), YoY growth of 44%.
• Q3 FY12 - 33 new generic launches, 16 new generic filings and 7 DMF filings
*Note: Adjustments on account of interest on bonus debentures (net of tax)
All figures in millions, except EPS
All dollar figures based on convenience translation rate of 1USD = ₹ 53.01
Dr. Reddy's Laboratories Limited and Subsidiaries
Unaudited Consolidated Income Statement
Particulars
Q3 FY12
Q3 FY11
Growth %
($)
(₹)
%
($)
(₹)
(%)
Revenue
522
27,692
100
358
18,985
100
46
Cost of revenues
210
11,117
40
162
8,571
45
30
Gross profit
313
16,575
60
196
10,414
55
59
Operating Expenses
Selling, general & administrative expenses
145
7,679
28
120
6,374
34
20
Research and development expenses
29
1,514
5
25
1,306
7
16
Other operating (income) / expense
(3)
(165)
(1)
(4)
(199)
(1)
(17)
Results from operating activities
142
7,547
27
55
2,933
15
157
Net finance (income) / expense
(3)
(174)
(1)
1
48
0
-
Share of (profit) / loss of equity accounted investees
(0)
(26)
(0)
0
1
0
-
Profit / (loss) before income tax
146
7,747
28
54
2,884
15
169
Income tax (benefit) / expense
49
2,616
9
3
152
1
-
Profit / (loss) for the period
97
5,131
19
52
2,732
14
88
Diluted EPS
0.6
30.2
0.3
16.1
88
Profit Computation: (In millions)
EBITDA Computation
Q3 FY12
Q3 FY11
($)
(₹)
($)
(₹)
PBT (reported)
146
7,747
54
2,884
Interest
3
155
2
98
Depreciation
17
899
14
758
Amortization
8
408
6
307
EBITDA
174
9,208
76
4,048
(In millions)
Adjusted PAT Computation
Q3 FY12
Q3 FY11
($)
(₹)
($)
(₹)
PAT (reported)
97
5,131
52
2,732
Adjustments:
Interest on Bonus Debentures (net of tax)
1
78
Adjusted PAT
98
5,209
52
2,732
Key Balance Sheet Items (In millions)
Particulars
As on 31st Dec 11
As on 30th Sep 11
($)
(₹)
($)
(₹)
Cash and cash equivalents
313
16,587
143
7,596
Trade receivables
498
26,373
388
20,568
Inventories
369
19,586
351
18,592
Property, plant and equipment
612
32,433
593
31,450
Goodwill and other intangible assets
287
15,182
285
15,115
Loans and borrowings (current & non-current)
727
38,502
591
31,303
Trade payables
173
9,189
169
8,940
Equity
980
51,927
907
48,081
Q3 FY12 Revenue Mix by Segment (In millions)
Q3 FY12
Q3 FY 11
Growth %
($)
(₹)
as a %
($)
(₹)
as a %
Global Generics
402
21,287
77
256
13,589
72
57
North America
11,114
4,765
133
Europe
2,426
2,124
14
India
3,333
3,000
11
Russia & Other CIS
3,317
2,880
15
RoW
1,097
820
34
PSAI
105
5,563
20
94
4,979
26
12
North America
1,170
770
52
Europe
1,651
1,830
(10)
India
862
622
39
RoW
1,880
1,757
7
Others
15
842
3
8
417
2
102
Total
522
27,692
100
358
18,985
100
46
Q3 FY12 Revenue Mix by Geography (In millions)
Q3 FY12
Q3 FY 11
Growth %
($)
(₹)
as a %
($)
(₹)
as a %
North America
242
12,826
46
110
5,823
31
120
Europe
82
4,325
16
77
4,078
21
6
India
79
4,194
15
68
3,625
19
16
Russia & Other CIS
63
3,317
12
54
2,880
15
15
Others
56
3,030
11
49
2,579
14
17
Total
522
27,692
100
358
18,985
100
46
Segmental Analysis
Global Generics: North America
Revenues from North America were at ₹ 11.1 billion in Q3 FY12 versus ₹ 4.8 billion in Q3 FY11. Growth was led by the high value launch of olanzapine 20 mg, new products launched in the last twelve months and strong volume growth across key products.
- 2 new products launched during the quarter - olanzapine 20 mg and olanzapine ODT.
- Strong volume growth contributed by key products such as lansoprazole, tacrolimus, omeprazole Mg OTC and Shreveport products and last twelve months new launches of fondaparinux and antibiotics portfolio.
- 26 prescription products feature among the Top 3 in market share (Source: IMS Volumes November 2011).
•During the quarter, 3 ANDAs were filed. The cumulative ANDA filings as of 31st December, 2011 are 187. A total of 79 ANDAs are pending for approval with the USFDA of which 40 are Para IVs and 10 are FTFs.
Global Generics: Russia & Other CIS
Revenues in Russia & Other CIS markets were at ₹ 3.3 billion in Q3 FY12 versus ₹ 2.9 billion in Q3 FY11.
- Revenues in Russia were at ₹ 2.8 billion in Q3 FY12. Growth was largely driven by rupee depreciation.
◦The company's secondary sales growth at 23% continued to outperform industry's growth of 19%. (Source: Pharmexpert Prescription Sales November 2011).
◦Top 5 products feature among Top 2 ranks in market share.
◦OTC portfolio grew by 24% over previous year.
• Revenues in Other CIS markets were at ₹ 557 million in Q3 FY12, driven largely by Ukraine and Kazakhstan.
Global Generics: India
Revenues in India were at ₹ 3.3 billion in Q3 FY12 versus ₹ 3.0 billion in Q3 FY11, driven by volume increase in key products and new product launches in the last twelve months.
- 6 new products launched during the quarter.
•Biosimilars portfolio grew by 25% over previous year
Global Generics: Europe
Revenues from Europe were at ₹ 2.4 billion in Q3 FY12 versus ₹ 2.1 billion in Q3 FY11.
- Revenues from Germany were at ₹ 1.5 billion in Q3 FY12. Growth in new product launches outside the scope of tender was offset by price erosion in products within tenders.
- Revenues from Rest of Europe were at ₹ 881million
Pharmaceutical Services and Active Ingredients (PSAI)
Revenues from PSAI were at ₹ 5.6 billion in Q3 FY12 versus ₹ 5.0 billion in Q3 FY11. Growth was largely driven by Pharmaceutical Services segment and benefit of rupee depreciation.
- During the quarter, 7 DMFs were filed globally including 2 in US, 2 in Europe and 3 in rest of the markets. The cumulative DMF filings as of 31st December 2011 are 513 globally.
Income Statement Highlights:
- Gross profit margin 60% to revenues in Q3 FY12, increased largely on account of a favorable mix of high margin olanzapine revenues and benefit of rupee depreciation.
- Selling, General & Administration (SG&A) expenses including amortization at ₹ 7.7 billion ($145 million) increased by 20% over Q3 FY11. This increase is on account of higher manpower and freight costs and the effect of rupee depreciation against multiple currencies.
- Net Finance income at ₹ 174 million ($3 million) in Q3 FY12 versus net Finance cost of ₹ 49 million ($1 million) in Q3 FY11. The change is on account of.
◦Net forex gain of ₹ 285 million ($5 million) in Q3 FY12 versus net forex loss of ₹ 45 million ($1 million) in Q3 FY11.
◦Net interest expense of ₹ 155 million ($3 million) in Q3 FY12 versus ₹ 98 million ($2 million) in Q3 FY11.
◦Profit on sale of investments of ₹ 44 million ($1 million) in Q3 FY12 versus ₹ 4 million in Q3 FY11.
- EBITDA of ₹ 9.2 billion ($174 million) in Q3 FY12, represents 33% of revenues and recorded a year-on-year growth of 127%. EBITDA of ₹ 18.6 billion ($351 million) for nine months ended December 2011, represents 27% of revenues and recorded a year-on-year growth of 59%.
- Profit after Tax adjusted for interest on bonus debentures (net of tax), was at ₹ 5.2 billion ($98 million) in Q3 FY12, 19% of revenues and year-on-year growth of 91%. Adjusted PAT for nine months ended December 2011 was ₹ 11.1 billion ($209 million) and recorded year-on-year growth of 44%.
- Adjusted EPS for Q3 FY12 was ₹ 30.6 ($0.6) versus ₹ 16.1 ($0.3) in Q3 FY11. Adjusted EPS for nine months ended December 2011 was ₹ 65.1 ($1.2).
- Capital expenditure for nine months ended December 2011, was ₹ 5.0 billion ($94 million).
Consolidated Income Statement: Nine months ending December 2011
All figures in millions, except EPS
All US dollar figures based on convenience translation rate of 1USD = ₹ 53.01
Particulars
9 Months FY12
9 Months FY11
Growth %
($)
(₹)
%
($)
(₹)
(%)
Revenue
1,323
70,153
100
1,028
54,520
100
29
Cost of revenues
581
30,818
44
475
25,206
46
22
Gross profit
742
39,335
56
553
29,314
54
34
Operating Expenses
Selling, general & administrative expenses
409
21,651
31
331
17,562
32
23
Research and development expenses
79
4,170
6
67
3,569
7
17
Other operating (income) / expense
(11)
(567)
(1)
(11)
(602)
(1)
(6)
Results from operating activities
266
14,081
20
166
8,786
16
60
Net finance (income) / expense
(1)
(78)
(0)
5
262
0
-
Share of (profit) / loss of equity accounted investees
(1)
(43)
(0)
(0)
(7)
(0)
514
Profit / (loss) before income tax
268
14,202
20
161
8,531
16
66
Income tax (benefit) / expense
63
3,366
5
16
836
2
303
Profit / (loss) for the period
204
10,836
15
145
7,695
14
41
Diluted EPS
1.2
63.7
0.9
45.3
41
Profit Computation (in millions)
EBITDA Computation
9 Months FY12
9 Months FY11
($)
(₹)
($)
(₹)
PBT (reported)
268
14,202
161
8,531
Interest
11
601
2
95
Depreciation
49
2,606
41
2,174
Amortization
23
1,202
17
912
EBITDA
351
18,611
221
11,712
Adjusted PAT Computation
9 Months FY12
9 Months FY11
($)
(₹)
($)
(₹)
PAT (reported)
204
10,836
145
7,695
Adjustments:
Interest on Bonus Debentures (net of tax)
5
235
Adjusted PAT
209
11,071
145
7,695
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 businesses - 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. Major markets include India, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, 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.
Contact Information
Investors and Financial Analysts:
Kedar Upadhye at [email protected] or on +91-40-66834297
Raghavender R at [email protected] or on +91-40-49002135
Milan Kalawadia (North America) at [email protected] or on +1-9082034931
Media
Rajan S at [email protected] or on +91-40- 49002445
Note: All discussions in this release are based on unaudited consolidated IFRS financials.