Dr. Reddy’s Q4 & FY13 Financial Results

Tue May 14, 2013 6:08am EDT

* Reuters is not responsible for the content in this press release.

Dr. Reddy’s Q4 & FY13 Financial Results

Highest ever Quarterly Performance

FY13 Revenues at Rs. 116.3 billion
(YoY growth of 26%)#

FY13 EBITDA at Rs. 27.8 billion

FY13 PAT* at Rs. 17.5 billion

Q4 FY13 Revenues at Rs. 33.4 billion
(YoY growth of 26%)

Q4 FY13 EBITDA at Rs. 9.3 billion

Q4 FY13 PAT at Rs. 5.7 billion

Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its audited consolidated financial results for the fourth quarter and full year ended March 31, 2013 under International Financial Reporting Standards (IFRS).

Key Highlights

  • Consolidated revenues for FY13 at Rs. 116.3 billion, recorded year-on-year growth of 20%. Excluding the beneficial impact of olanzapine exclusivity in FY12, registered year-on-year growth of 26%. Growth primarily driven by North America and Emerging Markets (which include Russia, other CIS countries and Rest of World (RoW) territories) in the Global Generics segment; and overall performance by Pharmaceutical Services and Active Ingredients segment.
    • Consolidated revenues of Rs. 33.4 billion in Q4 FY13, year-on-year growth of 26%.
  • EBITDA of Rs. 27.8 billion in FY13, 24% of revenues, with year-on-year growth of 9.5%.
    • EBITDA of Rs. 9.3 billion in Q4 FY13, 28% of revenues, with year-on-year growth of 37%.
  • Profit after tax* for FY13 at Rs. 17.5 billion, 15% of revenues with year-on-year growth of 17%
    • Profit after tax of Rs. 5.7 billion in Q4 FY13, 17% of revenues with year-on-year growth of 67%.
  • During the year, the company launched 78 new generic products, filed 56 new product registrations and filed 47 DMFs globally.
    • During the quarter, the company launched 18 new generic products, filed 14 new product registrations and filed 17 DMFs globally.

# Excluding olanzapine exclusivity in FY12

*PAT adjusted for Impairment of intangibles/goodwill

All figures in millions, except EPS

 

All US dollar figures based on convenience translation rate as on 31st March, 2013 1USD = Rs. 54.52

 
Dr. Reddy’s Laboratories Limited and Subsidiaries
Audited Consolidated Income Statement
 
Particulars   FY13     FY12     Growth %
($)     (Rs.)     %   ($)     (Rs.)     %  
Revenue 2,133 116,266 100 1,774 96,737 100 20
Cost of revenues 1,021   55,687   48   797   43,432   45   28  
Gross profit 1,111   60,579   52   978   53,305   55   14  
Operating Expenses
Selling, general & administrative expenses 616 33,584 29 529 28,867 30 16
Research and development expenses 141 7,673 7 108 5,911 6 30
Write down of intangible assets 9 507 0 19 1,040 1 (51 )
Write down of goodwill 3 181 0 0 0 0 0
Other operating income (45 ) (2,479 ) (2 ) (14 ) (765 ) (1 ) 224  
Results from operating activities 387   21,112   18   335   18,252   19   16  
Net finance income (8 ) (460 ) (0 ) (3 ) (160 ) (0 ) 187
Share of profit of equity accounted investees (2 ) (104 ) (0 ) (1 ) (54 ) (0 ) 93  
Profit before income tax 398   21,677   19   339   18,466   19   17  
Income tax expense 90   4,900   4   77   4,204   4   17  
Profit for the year 308   16,776   14   262   14,262   15   18  
 
Diluted EPS 1.8   98.44     1.5   83.81     17  
 
 

EBITDA Computation

       
Particulars FY13 FY12
($)   (Rs.) ($)     (Rs.)
PBT 398 21,677 339 18,466
Interest and Income from Mutual Funds (2 ) (94 ) 13 690
Depreciation 71 3,859 67 3,628
Amortization & Impairment 44   2,378   48   2,626
EBITDA 510   27,820   466   25,409
 
 

All figures in millions, except EPS

 

 

All US dollar figures based on convenience translation rate as on 31st March, 2013 1USD = Rs. 54.52

 

Appendix 1: Key Balance Sheet Items

 

Particulars As on 31st March 13     As on 31st March 12
($)     (Rs.) ($)     (Rs.)
Cash and cash equivalents 405   22,099 333   18,152
Trade receivables 586   31,972 465   25,339
Inventories 396   21,600 355   19,352
Property, plant and equipment 694   37,814 610   33,246
Goodwill and Other Intangible assets 257   14,021 248   13,529
Loans and borrowings (current & non-current) 674   36,760 591   32,210
Trade payables 218   11,862 174   9,503
Equity 1,341   73,085 1,054   57,444
 
 

Appendix 2: FY13 Revenue Mix by Segment

 
Particulars     FY13     FY12     Growth %
($)     (Rs.)     % ($)     (Rs.)     %
Global Generics 1,514   82,563 71 1,288   70,243 73 18  
North America   37,846 46   31,889 45 19  
Europe   7,716 9   8,259 12 (7 )
India   14,560 18   12,931 18 13  
Russia & Other CIS   16,908 20   13,260 19 28  
RoW   5,533 7   3,904 6 42  
PSAI 563   30,702 26 437   23,812 25 29  
North America   5,744 19   4,272 18 34  
Europe   12,007 39   8,424 35 43  
India   4,638 15   3,586 15 29  
RoW   8,313 27   7,531 32 10  
Proprietary Products & Others 55   3,001 3 49   2,682 3 12  
Total 2,133   116,266 100 1,774   96,737 100 20  
 
 

Segmental Analysis

Global Generics

Revenues from Global Generics segment for FY13 are at Rs. 82.6 billion with a year-on-year growth of 18%, primarily driven by North America and Emerging Markets.

  • Revenues from North America for FY13 at Rs. 37.8 billion, recorded year-on-year growth of 19%. Excluding the beneficial impact of olanzapine exclusivity in FY12, registered year-on-year growth of 38%.
    • Growth is largely driven by key limited competition products such as ziprasidone, fondaparinux, ramp-up in our antibiotics portfolio and products from our Shreveport facility.
    • Significant contribution from new products launched during the year. 14 new products have been launched during the year, major contributors being finasteride 1mg (180 day exclusivity), montelukast granules, atorvastatin, metoprolol, clopidogrel, ibandronate and zoledronic acid 4mg/5mL.
    • 19 product filings (18 ANDAs and 1 NDA). Cumulatively, 65 ANDAs are pending for approval with the USFDA of which 38 are Para IVs and 8 have ‘First To File’ status.
  • Revenues from Emerging Markets for FY13 at Rs. 22.4 billion recorded year-on-year growth of 31%.
    • Revenues from Russia for FY13 stood at Rs. 14.0 billion and recorded year-on-year growth of 27%, largely driven by volume growth in the major brands and new product launches.
    • Revenues from Other CIS markets for FY13 stood at Rs. 2.9 billion recorded year-on-year growth of 28%.
    • Revenues from Rest of World (RoW) territories at Rs. 5.5 billion recorded year-on-year growth of 42%. Of this Venezuela and Australia have shown strong growth in FY13 on the back of higher volumes for existing products and new product launches.
  • Revenues from India for FY13 at Rs. 14.6 billion recorded year-on-year growth of 13%.
    • Growth driven by volume increase across most key brands and new products launches.
    • 24 new brands were launched.
    • IMS Mar ’13, Dr. Reddy’s MAT Gr% 13.7% Vs IPM MAT Gr% of 10.2%. (Source: IMS).
    • Biosimilars portfolio has grown by 25% in FY13 compared to FY12.

Pharmaceutical Services and Active Ingredients (PSAI)

  • Revenues from PSAI for FY13 at Rs. 30.7 billion, recorded Year-on-year growth of 29%.
  • High growth on account of increased sales to generic customers on account of patent expirations and higher customer orders in the custom pharmaceutical business.
  • During the year, 47 DMFs were filed globally, including 5 in the US and 10 in Europe. The cumulative number of DMF filings as of March 31, 2013 is 577.

Income Statement Highlights:

  • Gross profit margin stood at 52.1% in FY13 as compared to 55.1% in FY12. Adjusted for the olanzapine exclusivity in FY12, the gross profit margins remained stable. Gross profit margin for Global Generics and PSAI business segments are at 59.0% and 32.5% respectively for FY13.
  • Selling, General and Administration (SG&A) expenses including amortization at Rs. 33.6 billion increased Year-on-year by 16%. The increase is primarily on account of regular year-on-year increments in manpower costs, selling costs and the effect of rupee depreciation against multiple currencies. SG&A as a percentage to sales stood at 29% in FY13 and compared to previous year there is a fall of 100 bps indicating improved operating leverage.
  • Research & development expenses for FY13 at Rs. 7.7 billion is at 6.6% of revenues as against Rs. 5.9 billion at 6.1% of revenues in FY12.
  • During the year Dr. Reddy’s benefited by an amount of USD 22.5 Mn from one-time settlement done with Nordion Inc [which is formerly MDS Inc]. The settlement is towards the damages sustained by the Company due to the breach by Nordion of the then existing Laboratory services agreement for bioequivalence studies.
  • Net Finance income in FY13 is at Rs. 460 million compared to the net finance income of Rs. 160 million in FY12. The change is on account of:
    • Net forex gain of Rs. 365 million in FY13 compared to net forex gain of Rs. 689 million.
    • Net interest expense of Rs. 118 million in FY13 compared to net interest expense of Rs. 690 million in FY12.
    • Incremental income from mutual funds of Rs. 51 million in FY13 over FY12.
  • EBITDA for FY13 is Rs. 27.8 billion, 24% of revenues and increased by 9.5% as compared to the previous year.
  • Profit after Tax* in FY13 at Rs. 17.5 billion, 15% of revenues and increased by 17% as compared to the previous year.
  • Diluted earnings per share in FY13 are Rs. 98.4
  • Capital expenditure for FY13 is Rs. 6.6 billion.

*PAT adjusted for Impairment of intangibles/goodwill

All figures in millions, except EPS

   

All US dollar figures based on convenience translation rate as on 31st March, 2013 1USD = Rs. 54.52

 

Appendix 3: Q4 FY13 Consolidated Income Statement

 
Particulars Q4 FY13     Q4 FY12     Growth %
($)     (Rs.)     %   ($)     (Rs.)     %  
Revenue 613 33,400 100 488 26,584 100 26
Cost of revenues 304   16,554   50   231   12,614   47   31
Gross profit 309   16,846   50   256   13,970   53   21
Operating Expenses
Selling, general & administrative expenses 160 8,722 26 132 7,217 27 21
Research and development expenses 43 2,326 7 32 1,741 7 34
Write down of intangible assets 0 0 0 19 1,040 4
Other operating income (30 ) (1,631 ) (5 ) (4 ) (199 ) (1 ) 720
Results from operating activities 136   7,427   22   77   4,172   16   78
Net finance income (7 ) (397 ) (1 ) (1 ) (82 ) (0 ) 386
Share of profit of equity accounted investees (0 ) (26 ) (0 ) (0 ) (11 ) (0 ) 131
Profit before income tax 144   7,850   24   78   4,265   16   84
Income tax expense 39   2,141   6   15   838   3   156
Profit for the period 105   5,709   17   63   3,427   13   67
 
Diluted EPS 0.6   33.51     0.4   20.09     67
 
 

Appendix 4: Q4 FY13 Profit Computation

 
Particulars     Q4 FY13     Q4 FY12
($)     (Rs.) ($)     (Rs.)
PBT 144 7,850 78 4,265
Interest (1 ) (52 ) 2 89
Depreciation 19 1,049 19 1,021
Amortization 8 446 7 383
Impairment 0   0   19   1,040
EBITDA 170   9,293   125   6,798
 

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.

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 and differentiated formulations. Major therapeutic focus is on gastro-intestinal, cardiovascular, diabetology, oncology, pain management and anti-infective. Major markets include India, USA, Russia-CIS and Europe apart from other select geographies within Emerging Markets.

For more information, log on to: www.drreddys.com

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

Dr. Reddy’s Laboratories Ltd.
Investors and Financial Analysts:
Kedar Upadhye, +91-40-66834297
kedaru@drreddys.com
or
Saunak Savla, +91-40-49002135
saunaks@drreddys.com
or
Milan Kalawadia (USA), +1 908-203-4931
mkalawadia@drreddys.com
or
Media:
S Rajan, +91-40-49002445
rajans@drreddys.com