Close
Hyderabad, India, February 03, 2012  
 

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 kedaru@drreddys.com or on +91-40-66834297
Raghavender R at raghavenderr@drreddys.com or on +91-40-49002135
Milan Kalawadia (North America) at mkalawadia@drreddys.com or on +1-9082034931

Media
Rajan S at rajans@drreddys.com or on +91-40- 49002445

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