Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) today announced its unaudited consolidated financial results for the quarter and nine months ended December 31, 2013 under International Financial Reporting Standards (IFRS). Key Highlights (Q3 FY14)
- Consolidated revenues at Rs. 35.3 billion, YoY growth of 23%.
- Revenues from the Global Generics (GG) segment at Rs. 29.4 billion, YoY growth of 41%. Growth is driven by North America and other Emerging Markets.
- Revenues from the Pharmaceutical Services and Active Ingredients (PSAI) segment at Rs. 5.1 billion, YoY decline of 29%.
- Research & Development (R&D) expenses at Rs. 3.0 billion, 8.4% to revenues versus 7.1% to revenues as in Q3 FY13.
- Selling, general & administrative (SG&A) expenses at Rs. 10.4 billion, 29.6% to revenues versus 29.9% to revenues as in Q3 FY13.
- EBITDA at Rs. 10.0 billion, 28.4% to revenues versus 21.1% to revenues as in Q3 FY13.
- PBT at Rs. 8.7 billion, 24.6% to revenues versus 16.3% to revenues as in Q3 FY13.
- PAT at Rs. 6.2 billion, 17.5% to revenues versus 13.2% to revenues as in Q3 FY13.
- During the quarter, the company launched 7 new generic products, filed 4 new product registrations and filed 19 DMFs globally.
|All amounts in millions, except EPS||All US dollar amounts based on convenience translation rate of 1USD = Rs. 61.92|
|Dr. Reddy’s Laboratories Limited and Subsidiaries|
|Unaudited Consolidated Income Statement|
|Particulars||Q3 FY14||Q3 FY13||Growth %|
|Cost of revenues||225||13,947||39.5||219||13,560||47.3||3|
|Selling, general & administrative expenses||169||10,443||29.6||138||8,571||29.9||22|
|Research and development expenses||48||2,979||8.4||33||2,025||7.1||47|
|Impairment loss/(reversal of impairment loss) on intangible assets||(8||)||(497||)||(1.4||)|
|Other operating income||(3||)||(177||)||(0.5||)||(4||)||(233||)||(0.8||)||(24||)|
|Results from operating activities||140||8,644||24.5||76||4,728||16.5||83|
|Net finance income / (expense)||0||15||0.0||(2||)||(96||)||(0.3||)||115|
|Share of profit of equity accounted investees||1||46||0.1||1||32||0.1||45|
|Profit before income tax||141||8,705||24.6||75||4,664||16.3||87|
|Income tax expense||(41||)||(2,521||)||(7.1||)||(14||)||(882||)||(3.1||)||186|
|Profit for the period||100||6,184||17.5||61||3,782||13.2||64|
|Diluted Earnings per share||0.59||36.2||0.36||22.2||63|
|Particulars||Q3 FY14||Q3 FY13|
|Profit before income tax||141||8,705||75||4,664|
|Impairment/(reversal of impairment)||(8||)||(497||)|
- Revenues from North America for Q3 FY14 at Rs. 16.2 billion, YoY growth of 76%. Growth largely driven by:
- Full quarter realization coupled with market share stabilization for recent key launches in limited competition space, namely azacitidine, decitabine, divalproex ER, donepezil 23 mg, zoledronic acid (5mg/100mL), zoledronic acid (4mg/5ml), etc.
- Significant traction in market share of key existing products, namely metoprolol ER, atorvastatin, etc.
- During the quarter, 2 ANDAs were filed. Cumulatively, 62 ANDAs are pending for approval with the USFDA of which 38 are Para IVs and we believe 8 to have ‘First To File’ status.
- Revenues from Emerging Markets (which include Russia, CIS countries and RoW territories) for Q3 FY14 at Rs. 7.4 billion, YoY growth of 25%.
- Revenues from Russia at Rs. 4.3 billion, YoY growth of 17%. Growth was slightly muted on account of delayed onset of winter in the current quarter.
- Revenues from CIS markets at Rs. 1.0 billion, YoY growth of 45%. Growth was largely driven by volume uptake of existing products and introduction of new products in Ukraine and Belarus.
- Revenues from RoW territories stood at Rs. 2.1 billion, YoY growth of 35%.
- Revenues from India for Q3 FY14 at Rs. 3.9 billion, YoY growth of 5%.
- Growth is muted primarily on account of impact of the revised prices under new pharma pricing policy.
- Revenues from Europe for Q3 FY14 at Rs. 1.9 billion, remained flat YoY.
- Revenues from PSAI for Q3 FY14 at Rs. 5.1 billion, YoY decline of 29%. De-growth on the back of lower number of ‘launch molecules’ to our customers during the quarter.
- During the quarter, 19 DMFs were filed globally, including 6 filings in Europe. The cumulative number of DMF filings as of December 31, 2013 is 612.
- Gross profit margin at 60.5% in Q3 FY14 registered nearly 800 basis points improvement versus gross profit margin in Q3 FY13. Gross profit margin for Global Generics and PSAI business segments are at 68.3% and 15.7% respectively.GG gross margin improved primarily on account of higher contribution coupled with higher realization from new product launches in North America, where as PSAI gross margin declined, primarily on the back of lower number of launch molecules to our customers and relatively higher overheads during the quarter.
- SG&A expenses including amortization in Q3 FY14 at Rs. 10.4 billion, YoY growth of 22%. The increase is primarily towards select brand building activities in the Emerging Market territories; and increase in manpower cost on account of additions and increments.
- R&D expenses stood at Rs. 3.0 billion, YoY growth of 47%; 8.4% to revenues in Q3 FY14 as compared to 7.1% to revenues as in Q3 FY13.
- An earlier recorded impairment charge relating to product intangibles in the generics portfolio, amounting Rs. 497 million, was reversed.
- Net Finance income at Rs. 15 million in Q3 FY14 compared to the net finance expense of Rs. 96 million as in Q3 FY13. The change is primarily on account of:
- Net incremental forex impact of Rs. 172 million
- Incremental net interest expense of Rs. 61 million
- EBITDA for Q3 FY14 at Rs. 10.0 billion, YoY growth of 67%; 28.4% to revenues.
- Profit after Tax in Q3 FY14 at Rs. 6.2 billion, YoY growth of 64%.
- Diluted earnings per share in Q3 FY 14 at Rs. 36.2
- Capital expenditure for Q3 FY14 is Rs. 2.4 billion.
|All US dollar amounts based on convenience translation rate of 1USD = Rs. 61.92|
|Appendix 1: Key Balance Sheet Items||(in millions)|
|Particulars||As on 31st Dec 2013||As on 30th Sep 2013|
|Cash and cash equivalents and current investments||504||31,202||439||27,202|
|Property, plant and equipment||708||43,844||686||42,477|
|Goodwill and Other Intangible assets||253||15,685||247||15,274|
|Loans and borrowings (current & non-current)||796||49,284||795||49,200|
|Appendix 2: Revenue Mix by Segment||(in millions)|
|Q3 FY14||Q3 FY13||Growth %|
|Russia & Other CIS||5,296||18||4,380||21||21|
|Proprietary Products & Others||14||880||3||11||697||2||26|
|All figures in millions, except EPS||All US dollar amounts based on convenience translation rate of 1USD = Rs. 61.92|
|Appendix 3: Consolidated Income Statement|
|Particulars||9M FY14||9M FY13||Growth %|
|Cost of revenues||670||41,482||43||632||39,133||47||6|
|Selling, general & administrative expenses||468||28,973||30||402||24,862||30.0||17|
|Research and development expenses||136||8,417||8.6||86||5,347||6.5||57|
|Impairment loss/(reversal of impairment loss) on intangible assets||(8||)||(497||)||(1||)||8||507||1|
|Impairment loss on goodwill||3||181||0|
|Other operating income||(19||)||(1,189||)||(1||)||(14||)||(848||)||(1||)||40|
|Results from operating activities||326||20,175||21||221||13,684||17||47|
|Net finance income||4||236||0||1||63||0||278|
|Share of profit of equity accounted investees||2||126||0||1||79||0||59|
|Profit before income tax||332||20,537||21||223||13,826||17||49|
|Income tax expense||(62||)||(3,841||)||(4||)||(45||)||(2,759||)||(3||)||39|
|Profit for the period||270||16,696||17||179||11,067||13||51|
|Appendix 4: EBITDA Computation:|
|Particulars||9M FY14||9M FY13|
|Profit before income tax||332||20,537||223||13,826|
|Impairment/(reversal of impairment)||(8||)||(497||)||11||688|
About Dr. Reddy'sDr. 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 unaudited consolidated IFRS financials.