[February 04, 2017] |
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Dr. Reddy's Q3 and 9M FY17 Financial Results
Dr. Reddy's Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY)
today announced its consolidated financial results for the third quarter
and nine months ended December 31, 2016 under International Financial
Reporting Standards (IFRS).
Q3 FY17: Key Highlights
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Revenues at Rs. 37.1 billion: QoQ growth: 3%
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Gross Profit Margin at 59.1%.
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Research & Development (R&D) spend at Rs. 5.0 billion. [13.4% of
Revenues]
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Selling, general & administrative (SG&A) expenses at Rs. 11.3 billion
[YoY decline: 6%]
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EBITDA at Rs. 8.8 billion [23.7% of Revenues]
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Profit after tax at Rs. 4.7 billion [12.7% of Revenues]
9M FY17: Key Highlights
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Revenues at Rs. 105.3 billion: YoY decline: 10%
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Gross Profit Margin at 57.2%.
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Research & Development (R&D) spend at Rs. 15.0 billion. [14.2% of
Revenues]
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Selling, general & administrative (SG&A) expenses at Rs. 35.4 billion
[YoY increase: 4%]
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EBITDA at Rs. 19.2 billion [18.2% of Revenues]
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Profit after tax at Rs. 8.9 billion [8.5% of Revenues]
Commenting on the results, Co-chairman and CEO, G V Prasad said "Our
performance in Q3 has delivered a modest sequential revenue growth of 3%
over the previous quarter. Our EBITDA has improved significantly from
the last quarter to Rs. 8.8 billion, on the back of enhanced emphasis on
operational efficiencies and controlling of SG&A costs across all our
businesses."
All amounts in millions, except EPS
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All US dollar amounts based on convenience translation rate of
I USD = Rs. 67.92
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Dr. Reddy's Laboratories Limited and Subsidiaries
Consolidated Income Statement
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Particulars
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Q3 FY17
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Q3 FY16
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Growth %
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($)
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(Rs.)
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%
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($)
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(Rs.)
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%
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Revenue
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546
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37,065
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100.0
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584
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39,679
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100.0
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(7)
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Cost of revenues
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223
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15,166
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40.9
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237
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16,089
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40.5
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(6)
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Gross profit
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322
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21,899
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59.1
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347
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23,590
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59.5
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(7)
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Operating Expenses
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Selling, general & administrative expenses
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167
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11,341
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30.6
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177
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12,039
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30.3
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(6)
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Research and development expenses
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73
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4,956
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13.4
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60
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4,095
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10.3
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21
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Other operating income
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(3)
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(187)
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(0.5)
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(2)
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(122)
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(0.3)
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53
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Results from operating activities
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85
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5,789
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15.6
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112
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7,578
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19.1
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(24)
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Net finance (income) / expense
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(1)
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(44)
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(0.1)
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1
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62
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0.2
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171
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Share of profit of equity accounted investees
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(1)
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(89)
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(0.2)
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(1)
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(64)
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(0.2)
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38
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Profit before income tax
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87
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5,922
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16.0
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112
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7,580
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19.1
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(22)
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Income tax expense
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18
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1,221
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3.3
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26
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1,788
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4.5
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(32)
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Profit for the period
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69
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4,701
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12.7
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85
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5,792
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14.6
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(19)
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-
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-
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Diluted EPS
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0.42
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28.32
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0.50
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33.86
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(16)
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EBITDA Computation
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Particulars
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Q3 FY 17
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Q3 FY 16
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$
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Rs.
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$
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Rs.
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Profit before income tax
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87
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5,922
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112
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7,580
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Interest income, net*
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(1)
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(53)
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(3)
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(236)
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Depreciation
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29
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1,936
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25
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1,685
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Amortization / Impairment
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15
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988
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16
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1086
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EBITDA
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129
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8,793
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149
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10,115
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EBITDA% to Revenues
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23.7%
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25.5%
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* Includes income from Investments
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Key Balance Sheet Items
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Particulars
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As on 31st Dec 16
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As on 30th Sep 16
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($)
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(Rs.)
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($)
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(Rs.)
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Cash and cash equivalents and Other current Investments
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297
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20,145
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315
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21,379
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Trade Receivables
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605
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41,119
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544
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36,939
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Inventories
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442
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30,052
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420
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28,516
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Property, plant and equipment
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842
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57,209
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825
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56,052
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Goodwill and Other Intangible assets
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736
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49,977
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747
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50,766
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Loans and borrowings (current & non-current)
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854
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57,999
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890
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60,480
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Trade & other payables
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196
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13,308
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181
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12,281
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Equity
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1,782
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121,040
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1,697
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115,264
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All amounts in millions, except EPS
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All US dollar amounts based on convenience translation rate of
I USD = Rs. 67.92
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Revenue Mix by Segment [Year on year]
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Particulars
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Q3 FY17
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Q3 FY16
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Growth %
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($)
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(Rs.)
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%
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($)
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(Rs.)
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%
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Global Generics
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451
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30,638
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83
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494
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33,558
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84
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-9
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North America
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16,595
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19,417
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-15
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Europe*
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2,148
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1,937
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11
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India
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5,947
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5,805
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2
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Emerging Markets#
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5,948
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6,399
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-7
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PSAI
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80
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5,400
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14
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75
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5,082
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13
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6
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North America
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1,259
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1,037
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21
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Europe
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1,828
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1,951
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-6
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India
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409
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622
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-34
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Rest of World
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1,904
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1,472
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29
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Proprietary Products & Others
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15
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1,027
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3
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15
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1,039
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3
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-1
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Total
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546
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37,065
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100
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584
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39,679
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100
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-7
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Revenue Mix by Segment [Sequential]
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Particulars
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Q3 FY 17
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Q2 FY 17
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Growth %
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($)
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(Rs.)
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%
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($)
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(Rs.)
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%
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Global Generics
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451
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30,638
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83
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427
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28,995
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81
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6
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North America
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16,595
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16,134
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3
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Europe*
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2,148
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1,776
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21
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India
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5,947
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6,251
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-5
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Emerging Markets#
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5,948
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4,834
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23
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PSAI
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80
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5,400
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14
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85
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5,784
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16
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-7
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North America
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1,259
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1,135
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11
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Europe
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1,828
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2,095
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-13
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India
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409
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575
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-29
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Rest of World
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1,904
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1,979
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-4
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Proprietary Products & Others
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15
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1,027
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3
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16
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1,078
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3
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-5
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Total
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546
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37,065
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100
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528
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35,857
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100
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3
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* Europe primarily includes Germany, UK and out licensing
sales business
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# Emerging Markets refers to Russia, other CIS countries, Romania
and Rest of the World markets including Venezuela
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Segmental Analysis
Global Generics (GG)
Revenues from GG segment at Rs. 30.6 billion, year-on-year
decline of 9%; primarily on account of lower contribution from North
America and Venezuela. However, it grew by 6% sequentially.
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Revenues from North America at Rs. 16.6 billion. Year-on-year
decline of 15%, primarily on account of increased competition in
valgancyclovir and our injectables franchise coupled with continuing
pricing pressure.
During the quarter we launched 5 new
products i.e. Aripiprazole, Lamotrigene ODT, Fluoxetine Tabs,
Raloxifene HCl and Nystatin - Triamcinolone Cream.
As of 31st
December 2016, cumulatively 92 generic filings are pending for
approval with the USFDA (90 ANDAs and 2 NDAs under 505(b)(2) route).
Of these 90 ANDAs, 59 are Para IVs out of which we believe 20 have
'First to File' status. Further, these 90 ANDAs include 7 ANDAs,
acquired from Teva, of which 6 are Para IVs.
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Revenues from Emerging Markets at Rs. 5.9 billion, year-on-year
decline of 7%. [Ex-Venezuela: growth of 7%]
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Revenues from Russia at Rs. 3.1 billion, year-on-year
decline of 2%. In constant currency it declined by 5%.
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Revenues from other CIS countries and Romania market at Rs.
1.0 billion, year-on-year growth of 16%.
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Revenues from Rest of World (RoW) territories at Rs. 1.8
billion, year-on-year decline of 23% primarily on account of sales
decline in Venezuela.
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Revenues from India at Rs. 5.9 billion, year-on-year growth:
2.4%.
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Revenues from Europe at Rs. 2.1 billion, year-on-year growth:
11%.
Pharmaceutical Services and Active Ingredients (PSAI)
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Revenues from PSAI at Rs. 5.4 billion, year-on-year growth of
6%. On a sequential basis revenues declined by 7%.
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During the quarter, 16 DMFs were filed globally of which 1 was in the
US. The cumulative number of DMF filings as of 31st
December, 2016 was 782.
Proprietary Products (PP)
Zembrace™Sym Touch ™(Suma 3 mg) injection and Sernivo™ (betamethasone
dipropionate) Spray, 0.05% are gradually gaining traction in
prescriptions.
Income Statement Highlights:
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Gross profit margin at 59.1% and declined by ~40 bps over that of
previous year, primarily on account of price erosion in the US. This
has been caused due to new competitor's entry in some of key
molecules. Gross profit margin for GG and PSAI business segments are
at 64.1% and 28.3% respectively.
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SG&A expenses at Rs. 11.3 billion, year-on-year decline by 6%. After
normalization of the Venezuela base effect and the settlement charge
paid to Novartis wrt zoledronic acid in previous year, there is a
marginal increase which is largely attributable to normal salary
increments, headcount and other costs.
Sequentially, there
is a decline of 4%. Normalized for the NPPA charge that we took last
quarter, there is no major variance.
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Research & development expenses at Rs. 5.0 billion. As a % to
Revenues- Q3 FY 17:13.4% | Q2 FY 17: 14.5% | Q1 FY 17: 14.8%]. Current
quarter also includes spend towards the IPR&D assets in-licensed from
Xenoport and Eisai. Focus continues on building complex generics,
biosimilars and differentiated products pipeline.
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Net Finance income at Rs. 44 million compared to the net finance
expense of Rs. 62 million in Q3FY16. The incremental benefit of Rs.
106 million is on account of:
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Net foreign exchange loss of Rs. 10 million in the current quarter
vs net foreign exchange loss of Rs. 297 million in the previous
year
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Increase in profit on sales of investments by Rs. 36 million.
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Net increase in interest expense of Rs. 218 million.
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Profit after Tax at Rs. 4.7 billion
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Diluted earnings per share is at Rs. 28.32
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Capital expenditure is at Rs. 3.0 billion.
Earnings Call Details (06:30 pm IST, 08:00 am EST, February 4, 2017)
The Company will host an earnings call 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:
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91 22 3960 0616
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International Toll Free Number
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USA
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18667462133
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UK
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08081011573
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Singapore
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8001012045
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Hong Kong
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800964448
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Playback of call:
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91 22 3065 2322, 91 22 6181 3322
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Conference ID:
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375#
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Web-cast
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More details will be provided through our website, www.drreddys.com
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Transcript of the event will be available at www.drreddys.com.
Playback will be available for a few days.
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About Dr. Reddy's: Dr. Reddy's Laboratories Ltd. (BSE: 500124,
NSE: DRREDDY, 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 dermatology. Dr. Reddy's operates in markets across the
globe. Our major markets include - USA, India, Russia and other CIS
countries. 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/20170204005010/en/
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