[February 09, 2016] |
|
Dr. Reddy's Q3 and 9M FY16 Financial Results
Dr. Reddy's Laboratories Ltd. (NYSE: RDY | BSE: 500124 | NSE: DRREDDY)
today announced its consolidated financial results for the quarter ended
December 31, 2015 under International Financial Reporting Standards
(IFRS).
Q3 FY16: Key Highlights
-
Consolidated revenues at Rs. 39.7 billion, year-on-year growth of 3%.
Growth is driven by healthy performance in NAG, Europe and India;
partially offset by Emerging markets, which were impacted by
unfavorable macro-economic conditions.
-
Gross Profit Margin at 59.5%, improved by ~130 bps over last year
-
Research & Development (R&D) spend at Rs. 4.1 billion. Continued focus
on building complex generics and differentiated products pipeline.
-
Selling, general & administrative (SG&A) expenses at Rs. 12.0 billion
-
EBITDA at Rs. 10.1 billion, 25.5% of revenues.
-
Profit after tax at Rs. 5.8 billion. Diluted EPS at Rs. 33.9
9M FY16: Key Highlights
-
Consolidated revenues at Rs. 117.1 billion, year-on-year growth of 7%
-
Gross Profit Margin at 60.6%, improved by ~200 bps over last year
-
Research & Development (R&D) spend at Rs. 13.0 billion. Continued
focus on building complex generics and differentiated products
pipeline.
-
Selling, general & administrative (SG&A) expenses at Rs. 34.1 billion
-
EBITDA at Rs. 31.4 billion, 26.8% of revenues
-
Profit after tax at Rs. 19.3 billion. Diluted EPS at Rs. 112.6
Commenting on the company's third quarter results, Co-chairman and
CEO, G V Prasad said, "Despite multiple challenges, we have had a
satisfactory quarter in terms of our financial performance. All
of our key markets continue to perform well and show healthy growth.
However, our performance has been impacted due to adverse macro-economic
conditions across key emerging market territories. The two approvals and
one tentative approval of our NDAs in the very first review cycle has
been a positive development and lays the foundation for building a
strong and sustainable proprietary products business. Enhancing our
quality management practices and meeting the US FDA expectations
continues to be our highest priority."
|
All amounts in millions, except EPS
|
All US dollar amounts based on convenience translation rate of
1 USD = Rs. 66.19
|
|
Dr. Reddy's Laboratories Limited and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
Consolidated Income Statement
|
|
|
|
|
|
|
|
|
|
|
Particulars
|
|
|
Q3 FY 16
|
|
|
Q3 FY 15
|
|
|
Growth %
|
|
|
($)
|
|
|
(Rs.)
|
|
|
%
|
|
|
($)
|
|
|
(Rs.)
|
|
|
%
|
|
|
|
Revenues
|
|
|
599
|
|
|
39,679
|
|
|
100.0
|
|
|
581
|
|
|
38,431
|
|
|
100.0
|
|
|
3
|
Cost of revenues
|
|
|
243
|
|
|
16,089
|
|
|
40.5
|
|
|
243
|
|
|
16,079
|
|
|
41.8
|
|
|
0
|
Gross profit
|
|
|
356
|
|
|
23,590
|
|
|
59.5
|
|
|
338
|
|
|
22,352
|
|
|
58.2
|
|
|
6
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general & administrative expenses
|
|
|
182
|
|
|
12,039
|
|
|
30.3
|
|
|
168
|
|
|
11,151
|
|
|
29.0
|
|
|
8
|
Research and development expenses
|
|
|
62
|
|
|
4,095
|
|
|
10.3
|
|
|
65
|
|
|
4,316
|
|
|
11.2
|
|
|
(5)
|
Other operating expense / (income)
|
|
|
(2)
|
|
|
(122)
|
|
|
(0.3)
|
|
|
(5)
|
|
|
(341)
|
|
|
(0.9)
|
|
|
(64)
|
Results from operating activities
|
|
|
114
|
|
|
7,578
|
|
|
19.1
|
|
|
109
|
|
|
7,226
|
|
|
18.8
|
|
|
5
|
Finance expense / (income), net
|
|
|
1
|
|
|
62
|
|
|
0.2
|
|
|
(15)
|
|
|
(1,013)
|
|
|
(2.6)
|
|
|
NA
|
Share of profit of equity accounted investees, net of income tax
|
|
|
(1)
|
|
|
(64)
|
|
|
(0.2)
|
|
|
(1)
|
|
|
(47)
|
|
|
(0.1)
|
|
|
38
|
Profit before income tax
|
|
|
115
|
|
|
7,580
|
|
|
19.1
|
|
|
125
|
|
|
8,286
|
|
|
21.6
|
|
|
(9)
|
Income tax expense
|
|
|
27
|
|
|
1,788
|
|
|
4.5
|
|
|
38
|
|
|
2,541
|
|
|
6.6
|
|
|
(30)
|
Profit for the period
|
|
|
88
|
|
|
5,792
|
|
|
14.6
|
|
|
87
|
|
|
5,745
|
|
|
15.0
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
|
0.51
|
|
|
33.86
|
|
|
|
|
|
0.51
|
|
|
33.61
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA Computation
|
|
|
|
|
|
|
|
Particulars
|
|
|
|
Q3 FY 16
|
|
Q3 FY 15
|
|
|
|
($)
|
|
(Rs.)
|
|
($)
|
|
(Rs.)
|
Profit before tax
|
|
|
|
115
|
|
7,580
|
|
125
|
|
8,286
|
Interest (income) / expense net*
|
|
|
|
(4)
|
|
(236)
|
|
(5)
|
|
(347)
|
Depreciation
|
|
|
|
25
|
|
1,685
|
|
22
|
|
1,462
|
Amortization
|
|
|
|
13
|
|
892
|
|
9
|
|
579
|
Impairment
|
|
|
|
3
|
|
194
|
|
8
|
|
534
|
EBITDA
|
|
|
|
153
|
|
10,115
|
|
159
|
|
10,515
|
EBITDA (% to sales)
|
|
|
|
|
|
25.5
|
|
|
|
27.4
|
|
|
|
|
|
|
|
|
|
|
|
* Includes income from investments
|
All amounts in millions, except EPS
|
All US dollar amounts based on convenience translation rate of
1 USD = Rs. 66.19
|
|
|
Key Balance Sheet Items
|
|
|
|
|
|
|
|
Particulars
|
|
|
As on 31st Dec 15
|
|
|
As on 30th Sep 15
|
|
|
($)
|
|
|
(Rs.)
|
|
|
($)
|
|
|
(Rs.)
|
Cash and cash equivalents and Other current Investments
|
|
|
575
|
|
|
38,028
|
|
|
514
|
|
|
34,050
|
Trade receivables
|
|
|
633
|
|
|
41,904
|
|
|
647
|
|
|
42,840
|
Inventories
|
|
|
403
|
|
|
26,689
|
|
|
410
|
|
|
27,147
|
Property, plant and equipment
|
|
|
797
|
|
|
52,736
|
|
|
771
|
|
|
51,055
|
Goodwill and Other Intangible assets
|
|
|
374
|
|
|
24,739
|
|
|
365
|
|
|
24,155
|
Loans and borrowings (current & non-current)
|
|
|
511
|
|
|
33,801
|
|
|
560
|
|
|
37,072
|
Trade payables
|
|
|
179
|
|
|
11,833
|
|
|
193
|
|
|
12,766
|
Equity
|
|
|
1,944
|
|
|
128,681
|
|
|
1,836
|
|
|
121,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Mix by Segment
|
|
|
|
|
|
|
|
|
|
|
|
Particulars
|
|
|
|
Q3 FY 16
|
|
|
Q3 FY 15
|
|
|
Growth %
|
|
|
|
($)
|
|
|
(Rs.)
|
|
|
%
|
|
|
($)
|
|
|
(Rs.)
|
|
|
%
|
|
|
Global Generics
|
|
|
|
507
|
|
|
33,558
|
|
|
84
|
|
|
473
|
|
|
31,335
|
|
|
81
|
|
|
7
|
North America
|
|
|
|
|
|
|
19,417
|
|
|
|
|
|
|
|
|
16,462
|
|
|
|
|
|
18
|
Europe*
|
|
|
|
|
|
|
1,937
|
|
|
|
|
|
|
|
|
1,702
|
|
|
|
|
|
14
|
India
|
|
|
|
|
|
|
5,805
|
|
|
|
|
|
|
|
|
4,328
|
|
|
|
|
|
34
|
Emerging Markets#
|
|
|
|
|
|
|
6,399
|
|
|
|
|
|
|
|
|
8,843
|
|
|
|
|
|
(28)
|
PSAI
|
|
|
|
77
|
|
|
5,082
|
|
|
13
|
|
|
92
|
|
|
6,112
|
|
|
16
|
|
|
(17)
|
North America
|
|
|
|
|
|
|
1,037
|
|
|
|
|
|
|
|
|
894
|
|
|
|
|
|
16
|
Europe
|
|
|
|
|
|
|
1,951
|
|
|
|
|
|
|
|
|
2,639
|
|
|
|
|
|
(26)
|
India
|
|
|
|
|
|
|
622
|
|
|
|
|
|
|
|
|
948
|
|
|
|
|
|
(34)
|
Rest of World
|
|
|
|
|
|
|
1,472
|
|
|
|
|
|
|
|
|
1,631
|
|
|
|
|
|
(10)
|
Proprietary Products & Others
|
|
|
|
16
|
|
|
1,039
|
|
|
3
|
|
|
15
|
|
|
984
|
|
|
3
|
|
|
6
|
Total
|
|
|
|
599
|
|
|
39,679
|
|
|
100
|
|
|
581
|
|
|
38,431
|
|
|
100
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Europe primarily includes Germany, UK and out licensing sales
business
# Emerging Markets refers to Russia, other CIS countries, Romania and
Rest of the World markets including Venezuela
Note: Effective Q1 FY 16, there was a change in the monitoring of
performance of one product from Global Generics to Proprietary Products.
Consequently, revenues and related costs of this product for the
previous periods have been reclassified to conform to such change.
Segmental Analysis
Global Generics
Revenues from Global Generics segment for Q3 FY16 are at Rs. 33.6
billion, year-on-year growth of 7%, primarily driven by North America,
Europe and India.
-
Revenues from Europe for Q3 FY16 at Rs. 1.9 billion,
year-on-year growth of 14%. Growth was primarily driven by
aripiprazole and pregabalin.
Pharmaceutical Services and Active Ingredients (PSAI)
-
Revenues from PSAI at Rs. 5.1 billion, and declined by 17%
year-on-year.
-
During the quarter, 21 DMFs were filed globally and 3 in the US. The
cumulative number of DMF filings as of December 31, 2015 was 774.
Income Statement Highlights:
-
Gross profit margin at 59.5% and improved by ~130 bps over that of
previous year. Gross profit margin for Global Generics (GG) and PSAI
business segments are at 65.6% and 17.4% respectively.
-
SG&A expenses at Rs. 12.0 billion, year-on-year growth of 8%. This
increase is largely due to the ongoing remediation activities related
to the USFDA's observations and Warning Letter, settlement of ongoing
patent litigation with Novartis on zoledronic acid and certain routine
items related to manpower and other spends.
-
Research & development expenses at Rs. 4.1 billion, year-on-year
decline of 5%. As a % to sales R&D expenses stood at 10.3% in Q3 FY16
as compared to 11.2% in Q3 FY15. The decline is largely due to the
receipt of our share of development costs and other contractual
amounts from Merck Serono for biosimilars development program.
-
Net Finance expense at Rs. 62 million compared to the net finance
income of Rs. 1,013 million in Q3 FY15. The incremental charge of Rs.
1,075 million is on account of:
-
Net foreign exchange gain of Rs. 339 million in the current
quarter vs net foreign exchange gain of Rs. 666 million in the
previous year
-
Certain monetary assets and liabilities of the Venezuelan
subsidiary that may not qualify for translation at the CENCOEX
rate of VEF 6.3 per USD, have been translated at the SIMADI rate
of VEF 198.5 per USD and the resultant charge of Rs. 637 million
has been recorded as foreign exchange loss.
-
Decline in profit on sales of investments by Rs. 139 million.
-
Net increase in interest income of Rs. 29 million.
-
Profit after Tax at Rs. 5.8 billion, 14.6% of revenues, year-on-year
growth of 1%.
-
Diluted earnings per share is at Rs. 33.9
-
Capital expenditure is at Rs. 3.1 billion.
Earnings Call Details (06.30 pm IST, February 9, 2016)
The Company will host an earnings call at 06.30 pm IST on February 9,
2016, to discuss the performance and answer any questions from
participants. This call will be accessible through an audio dial-in and
a web-cast.
Audio conference Participants can dial-in on the numbers below
|
|
|
|
|
|
|
Primary number:
|
|
|
|
|
|
91 22 3960 0616
|
Secondary number:
|
|
|
|
|
|
91 22 6746 5826
|
International Toll Free Number
|
|
|
USA
|
|
|
18667462133
|
|
|
|
UK
|
|
|
08081011573
|
|
|
|
Singapore
|
|
|
8001012045
|
|
|
|
Hong Kong
|
|
|
800964448
|
|
|
|
|
|
|
|
Playback of call:
|
|
|
|
91 22 3065 2322, 91 22 6181 3322
|
Conference ID:
|
|
|
|
375#
|
Web-cast
|
|
|
|
More details will be provided through our website, www.drreddys.com
|
Transcript of the event will be available at www.drreddys.com.
Playback will be available for a few days.
|
………………………………………………………………………………………………………………………………………………………..…………………………..…
About Dr. Reddy's: Dr. Reddy's Laboratories Ltd. (NYSE: RDY) is
an integrated pharmaceutical company, committed to providing affordable
and innovative medicines for healthier lives. Through its three
businesses - Pharmaceutical Services & Active Ingredients, Global
Generics and Proprietary Products - Dr. Reddy's offers a portfolio of
products and services including APIs, custom pharmaceutical services,
generics, biosimilars and differentiated formulations. Our major
therapeutic areas of focus are gastro-intestinal, cardiovascular,
diabetology, oncology, pain management and anti-infectives. Dr. Reddy's
operates in markets across the globe. Our major markets include - USA,
Russia & CIS, Venezuela and India. For more information, log on to: www.drreddys.com
………………………………………………………………………………………………………………………………………………………..…………………………..…
Disclaimer: This press release may include statements of future
expectations and other forward-looking statements that are based on the
management's current views and assumptions and involve known or unknown
risks and uncertainties that could cause actual results, performance or
events to differ materially from those expressed or implied in such
statements. In addition to statements which are forward-looking by
reason of context, the words "may," "will," "should," "expects,"
"plans," "intends," "anticipates," "believes," "estimates," "predicts,"
"potential," or "continue," and similar expressions identify
forward-looking statements. Actual results, performance or events may
differ materially from those in such statements due to without
limitation, (i) general economic conditions such as performance of
financial markets, credit defaults, currency exchange rates, interest
rates, persistency levels and frequency / severity of insured loss
events (ii) mortality and morbidity levels and trends, (iii) changing
levels of competition and general competitive factors, (iv) changes in
laws and regulations and in the policies of central banks and/or
governments, (v) the impact of acquisitions or reorganisation, including
related integration issues.
The company assumes no obligation to update any information contained
herein.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160209005801/en/
[ Back To TMCnet.com's Homepage ]
|