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Hyderabad, India, July 19th, 2012  
 


Dr. Reddy’s Q1 FY13 Financial Results
Q1 FY13 Revenues at Rs.25.4 billion, YoY growth of 28%
Q1 FY13 PAT at Rs.3.4 billion, YoY growth of 28%

Hyderabad, India, July 19th, 2012: Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its unaudited consolidated financial results for the quarter ended June 30, 2012 under International Financial Reporting Standards (IFRS).

Key Highlights

  • Consolidated revenues at Rs.25.4 billion in Q1 FY13, year-on-year growth of 28%, driven by healthy growth in key markets of North America, Russia & other emerging markets in Global Generics segment.
  • EBITDA of Rs.5.1 billion in Q1 FY13, 20% of revenues.
  • PAT of Rs.3.4 billion in Q1 FY13, 13% of revenues & recorded YoY growth of 28%.
  • During the quarter, the company launched 33 new generic products, filed 18 new product registrations and filed 7 DMFs globally.

 All figures in millions, except EPS
All dollar figures based on convenience translation rate of 1USD = Rs. 55.57

Dr. Reddy's Laboratories Ltd. and Subsidiaries
Audited Consolidated Income Statement

Particulars Q1 FY13 Q1 FY12 Growth %
($) (Rs.) % ($) (Rs.) (%)
Revenue 457 25,406 100 356 19,783 100 28
Cost of revenues 214 11,865 47 166 9,228 47 29
Gross profit 244 13,541 53 190 10,555 53 28
Operating Expenses              
Selling, general & administrative expenses 149 8,277 33 122 6,755 34 23
Research and development expenses 28 1,564 6 22 1,197 6 31
Other operating (income) / expense (4) (218) (1) (3) (186) (1) 17
Results from operating activities 70 3,918 15 50 2,789 14 41
Net finance (income) / expense 4 212 1 1 46 0 361
Share of (profit) / loss of equity accounted investees (0) (19) (0) (0) (4) (0) 375
Profit / (loss) before income tax 67 3,725 15 49 2,746 14 36
Income tax (benefit) / expense 7 365 1 2 120 1 205
Profit / (loss) for the period 60 3,360 13 47 2,627 13 28

Diluted EPS 0.4 19.7   0.3 15.5   28


Profit Computation:

EBITDA Computation Q1 FY13 Q1 FY12
($) (Rs.) ($) (Rs.)
PBT 67 3,725 49 2,746
Net Interest Expenses / (Income) 1 44 4 221
Depreciation 16 896 15 828
Amortization 7 400 7 405
Reported EBITDA 91 5,065 76 4,201
Adjustments of exceptional items:        
One-time charge of Voluntary Retirement Scheme     2 136
Adjusted EBITDA 91 5,065 78 4,337

PAT Computation Q1 FY13 Q1 FY12
($) (Rs.) ($) (Rs.)
PAT 60 3,360 47 2,627
Adjustments:        
Voluntary retirement scheme     2 136
Tax adjustment (5) (306) (6) (342)
Adjusted PAT 55 3,054 44 2,421



SEGMENTAL ANALYSIS

Global Generics

Revenues from Global Generics segment at Rs.19.1 billion in Q1 FY13, year-on-year growth of 32% driven by key markets of North America, Russia & other emerging markets.

  • Revenues from North America at Rs.7.9 billion in Q1 FY13 grew by 27% in USD terms, over previous year.
    • Growth was largely driven by new product launches of clopidogrel, OTC lansoprazole and was further supported by key products of ziprasidone, fondaparinux, quetiapine, etc, marginally offset by regular year-on-year price declines in existing product basket.
    • 5 new products were launched during the quarter including clopidogrel 300 Mg which was launched under 180-day exclusivity.
    • 29 products of prescription portfolio feature among the Top 3 ranks in market shares (Source: IMS Health Volumes April 2012).
    • During the quarter, 4 ANDAs were filed. Cumulatively 73 ANDAs are pending for approval with the USFDA of which 36 are Para IVs and 6 are with FTF status.
  • Revenues in Russia and Other CIS markets at Rs.4.2 billion in Q1 FY13 represented year-on-year growth of 38%.
    • Revenues in Russia at Rs.3.5 billion in Q1 FY13 was the highest ever from this market and represented year-on-year growth of 30% in Rouble terms.
    • Growth was driven by new product launches, volume increase across key brands and OTC portfolio.
    • Revenues in Other CIS markets at Rs.0.65 billion in Q1 FY13 grew by 22% over previous year.
  • Revenues in India at Rs.3.5 billion in Q1 FY13 grew by 19% over previous year.
    • Growth driven by volume increase across most of our key brands.
    • Biosimilars portfolio grew by 15% over previous year.
    • 10 new brands were launched during the quarter.
  • Revenues from Europe at Rs.2.2 billion in Q1 FY13 grew by 14% over previous year.
    • Revenues from Germany at Rs.1.5 billion in Q1 FY13 grew by 17% in Euro terms over previous year. This growth was largely due to the products supplied under the AOK tender won last year.

Pharmaceutical Services and Active Ingredients (PSAI)

  • Revenues from PSAI are at Rs.5.5 billion in Q1 FY 13, year-on-year growth of 14%.
  • During the quarter, 7 DMFs were filed globally, with 1 each in the US and Europe. The cumulative DMF filings as of June 30, 2012 are 550.

Income Statement Highlights:

  • Gross profit margin at 53% in Q1 FY13 remained flat versus Q1 FY12. Gross profit margin for Global Generics and PSAI business segments were at 59% and 31% respectively.
  • Selling, General and Administration (SG&A) expenses including amortization at Rs.8.3 billion increased by 23% over previous year. This increase is on account of year-on-year salary increments, higher sales & marketing costs and the effect of rupee depreciation against multiple currencies.
  • Research & development expenses for Q1 FY13 at Rs.1.6 billion is at 6% to sales.
  • Net Finance expense was at Rs.212 million in Q1 FY13 versus Rs.46 million in Q1 FY12. The change is on account of :
    • Net forex loss of Rs.209 million in Q1 FY13 versus net forex gain of Rs.158 million in Q1 FY12. Q1 FY13 includes a charge of Rs.297 million due to time value of options. Adjusting the impact of this charge, net forex gain on P&L is at Rs.88 million in Q1 FY13.
    • Net interest expense of Rs.44 million in Q1 FY13 versus Rs.221 million in Q1 FY12. This decrease in expense is largely on account of higher interest income from FD & mutual fund.
    • Profit on sale of investments of Rs.41 million in Q1 FY13 versus Rs.17 million in Q1 FY12.
  • EBITDA of Rs.5.1 billion in Q1 FY13, 20% of revenues and recorded year-on-year growth of 21%.
  • Profit after Tax in Q1 FY13 at Rs.3.4 billion recorded year-on-year growth of 28%.
  • Diluted earnings per share in Q1 FY 13 were Rs.19.7.
  • Capital expenditure in Q1 FY13 was Rs.1.9 billion.

(in millions)Appendix 1: Key Balance Sheet Items

Particulars As on 30th Jun 12 As on 31st Mar 12
($) (Rs.) ($) (Rs.)
Cash and cash equivalents 384 21,353 327 18,152
Trade receivables 449 24,975 456 25,339
Inventories 370 20,580 348 19,352
Property, plant and equipment 622 34,550 598 33,246
Goodwill and other intangible assets 245 13,597 243 13,529
Loans and borrowings (current & non-current) 638 35,430 580 32,210
Trade payables 157 8,750 171 9,503
Equity 1,074 59,664 1,034 57,444


(in millions)Appendix 2: Revenue Mix by Segment

  Q1FY13 Q1FY12 Growth %
($) (Rs.) as a % ($) (Rs.) as a %
Global Generics 343 19,066 75 260 14,424 73 32
North America   7,920 42   5,756 40 38
Europe   2,178 11   1,917 13 14
India   3,482 18   2,936 20 19
Russia & Other CIS   4,167 22   3,018 21 38
RoW   1,319 7   797 6 65
PSAI 99 5,527 22 87 4,832 24 14
North America   1,064 19   842 17 26
Europe   2,233 40   1,693 35 32
India   611 11   662 14 (8)
RoW   1,619 29   1,635 34 (1)
Proprietary Products and Others 15 813 3 9 527 3 54
Total 457 25,406 100 356 19,783 100 28


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.

Contact Information

Investors and Financial Analysts:

Kedar Upadhye at kedaru@drreddys.com / +91-40-66834297
Saunak Savla at saunaks@drreddys.comm / +91-40-49002135
Milan Kalawadia (North America) at mkalawadia@drreddys.com / +1 908-203-4931

Media

S Rajan at rajans@drreddys.com / +91-40- 49002445

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