Dr. Reddy's Laboratories Ltd. today announced its audited financial results for the full year ended March 31, 2004.
Notes
- In line with global disclosure standards, the company commenced reporting its financials on a consolidated basis since Q1 FY03.
- Current quarter financial discussions below are on a consolidated basis as per the US GAAP.
- Detailed analysis of the financials is available on the Company's website at www.drreddys.com.
Key highlights
- Revenues at Rs 20 billion as against Rs 18 billion in FY03; YoY growth of 11%.
- Revenues outside India at Rs 12.9 billion as against Rs 11.6 billion in FY03; YoY growth of 12%; Contribution at 64% of total revenues.
- Revenues from US and Europe together increased by 12% to Rs 8.1 billion as against Rs 7.3 billion in FY03, driven primarily by the performance of ramipril in Europe and a 14% growth in Europe generics segment.
- During the year, we recorded one-time exceptional charges and provision amounting to Rs 385 million. This includes a provision of Rs 184 million relating to the Government of India price notification court case on norfloxacin; charge of Rs 115 million relating to the AmVaz project; charge of Rs 58 million relating to the divestment of Compact Electric Limited, which has a corresponding tax benefit; charge of Rs 28 million relating to divestment and impairment of assets.
- Net income is at Rs 2.5 billion (12% of total revenues) as against Rs 3.4 billion (19% of total revenues) in FY03. This translates to a diluted EPS of Rs 32.32 as against Rs 44.49 in FY03.
- Selling, General & Administration (SG&A) expenses increased by Rs 1.5 billion from Rs 5.1 billion in FY03 to Rs 6.6 billion in FY04 or 33% of total revenues. This increase is primarily on account of increase in legal & professional charges, manpower costs as well as one-time non-recurring charges and provision recorded during the year.
- R&D investments increased by 41% to Rs 2 billion as against Rs 1.4 billion in FY03. As a % of revenues, R&D expenditure is at 10% as against 8% in FY03.
- Company commenced clinical trials on 2 new NCEs during the year – DRF 10945 (predominantly PPAR alpha agonist) in Canada and DRF 1644(Topoisomerase I inhibitor) in India.
- Company filed 16 Drug Master Files (DMFs) during the year. This takes the cumulative DMF filings to 56.
- Company submitted 13 ANDAs including 8 Para IV filings, taking the total ANDAs pending at the USFDA to 35. Of these, 24 include Para IV filings.
- In the Active Pharmaceutical Ingredients segment, revenues increased by 20% to Rs 7.6 billion as against Rs 6.3 billion in FY03. This growth was primarily driven by the growth in India and Europe. Revenues in Europe increased to Rs 1.6 billion as against Rs 466 million in FY03 driven by the sales of ramipril, which recorded sales of Rs 1.2 billion in FY03. Revenues in India increased by 21% to Rs 2.1 billion as against Rs 1.7 billion driven by volume growth in key products.
- In the Branded Formulations segment, revenues in India increased by 10% to Rs 4.7 billion as against Rs 4.3 billion in FY03. This growth was achieved despite the brand rationalization and a lower industry growth rate of 7.3% (ORG MAT March 2004).
Audited US GAAP Financials for the year ended March 31, 2004
All figures in millions, except EPS
All dollar figures based on convenience translation rate of 1USD = Rs 43.4
EXTRACTED FROM THE AUDITED INCOME STATEMENT
| Total Revenues |
463 |
20,081 |
100 |
416 |
18,070 |
100 |
11 |
| Cost of revenues * |
215 |
9,346 |
47 |
181 |
7,848 |
43 |
19 |
| Gross profit |
247 |
10,735 |
53 |
236 |
10,222 |
57 |
5 |
| Selling, General & Administrative Expenses * |
151 |
6,563 |
33 |
118 |
5,103 |
28 |
29 |
| R&D Expenses |
46 |
1,992 |
10 |
33 |
1,412 |
8 |
41 |
| Amortization Expenses |
9 |
383 |
2 |
10 |
419 |
2 |
-9 |
| Forex loss/ (gains) |
-7 |
-283 |
-1 |
2 |
70 |
0 |
(NC) |
| Total operating expenses |
199 |
8,655 |
43 |
161 |
7,004 |
39 |
24 |
| Operating income |
48 |
2,080 |
11 |
74 |
3,218 |
18 |
-35 |
| Equity in loss of affiliates |
1 |
44 |
0 |
2 |
92 |
1 |
-52 |
| Other expenses/(income) net * |
-12 |
-504 |
-3 |
-16 |
-683 |
-4 |
-26 |
| Income before income taxes |
59 |
2,540 |
13 |
88 |
3,809 |
21 |
-33 |
| Income tax (benefit)/expense |
2 |
69 |
0 |
9 |
398 |
2 |
-83 |
| Minority interest |
0 |
-3 |
0 |
0 |
7 |
0 |
(NC) |
| Net income |
57 |
2,474 |
12 |
78 |
3,404 |
19 |
-27 |
| Diluted EPS |
0.74 |
32.32 |
|
1.03 |
44.49 |
|
|
* Includes one-time exceptional charges and provision of Rs 385 million for the year ended March 31, 2004 as follows. Of this, Rs 368 million was recorded in Q4 FY04.
- Charge of Rs 115 million relating to the AmVaz Project,
- Provision of Rs 184 million relating to the Government of India price notification court case on norfloxacin,
- Charge of Rs 58 million relating to the divestment of Compact Electric Limited and
- Charge of Rs 28 million relating to divestment and impairment of assets
Segmental Analysis
Active Pharmaceutical Ingredients (APIs)
- Revenues at Rs 7.6 billion as against Rs 6.3 billion in FY03; YoY growth of 20%
- Revenues in India at Rs 2.1 billion as against Rs 1.7 billion in FY03. YoY growth of 21% driven primarily by the volume growth in key products of ciprofloxacin, atorvastatin, norfloxacin and losartan potassium.
- Revenues outside India at Rs 5.5 billion as against Rs 4.6 billion in FY03; YoY growth of 20%; contribution at 72% to the segment's revenues.
- Europe contributed 21% of total revenues as against 7% in FY03. Revenue growth was driven by sales of ramipril, which contributed Rs 1.2 billion in revenues.
- The Company filed 16 US DMFs during the year taking the total filings to 56.
Generics
- Revenues in this segment at Rs 4.34 billion as against Rs 4.28 billion in FY03.
- North America contributed 78% to the total revenues and Europe contributed 21%.
- Fluoxetine capsules 40mg and tizanidine tablets 2 & 4 mg together contributed revenues of 2.4 billion as against Rs 2.6 billion in FY 03. This decline was primarily on account of increased competition particularly in the fourth quarter.
- Revenues in Europe grew by 14% to Rs 930 million as against Rs 814 million in FY03. The growth was driven by a combination of new product launches and higher revenues from omeprazole capsules. Revenues from omeprazole capsules were at Rs 325 million as against Rs 283 million in FY03.
- During the year, the Company filed 13 ANDAs, including 8 Para IVs. This takes the total ANDAs pending at the USFDA to 35, including 24 Para IV filings.
Branded Formulations - International
- Revenues at Rs 2.8 billion, an increase of 9% over FY03. The growth was primarily driven by the performance of the CIS markets.
- Revenues in Russia grew by 7% to Rs 1.8 billion as against Rs 1.7 billion in FY03.
Branded Formulations - India
- Revenues at Rs 4.7 billion, an increase of 10% over FY03. This growth was achieved despite brand rationalization and lower industry growth of 7.3% (ORG MAT March 2004).
- Omez, our brand of Omeprazole increased by 34% to Rs 624 million as against Rs 467 million in FY03.
- New product launches contributed Rs 107 million in FY03 (2.3% of total revenues)
Other Businesses
- Revenues from oncology & biotechnology segment declined to Rs 411 million. During the year, we launched our oncology products in Brazil. The growth in our oncology products was offset by the discontinuation of trading operations in our diagnostic division effective April 1, 2003.
- Revenues from Custom Chemical Services increased by 65% to Rs 113 million from Rs 69 million in FY03.
| Total Revenues |
110 |
4,755 |
100 |
98 |
4,262 |
100 |
12 |
| Cost of revenues* |
52 |
2,266 |
48 |
36 |
1,561 |
37 |
45 |
| Gross profit |
57 |
2,488 |
52 |
62 |
2,700 |
63 |
-8 |
| Selling, General & Administrative Expenses* |
48 |
2,080 |
44 |
37 |
1,595 |
37 |
30 |
| R&D Expenses |
15 |
659 |
14 |
12 |
501 |
12 |
32 |
| Amortization Expenses |
2 |
94 |
2 |
2 |
94 |
2 |
1 |
| Forex loss/ (gains) |
-1 |
-46 |
-1 |
0 |
3 |
0 |
(NC) |
| Total operating expenses |
64 |
2,788 |
59 |
51 |
2,192 |
51 |
27 |
| Operating income |
-7 |
-299 |
-6 |
12 |
508 |
12 |
(NC) |
| Equity in loss of affiliates |
0 |
4 |
1 |
0 |
10 |
0 |
-62 |
| Other expenses/(income) net* |
-0.7 |
-32 |
-1 |
-4.1 |
-176 |
-4 |
-82 |
| Income before income taxes |
-6 |
-271 |
-6 |
16 |
674 |
16 |
(NC) |
| Income tax (benefit)/expense |
-10 |
-430 |
-9 |
1 |
48 |
1 |
(NC) |
| Minority interest |
0 |
-3 |
0 |
0 |
3 |
0 |
(NC) |
| Net income |
4 |
162 |
3 |
14 |
623 |
15 |
-74 |
| Diluted EPS |
0.05 |
2.1 |
|
0.19 |
8.1 |
|
|
* Includes one-time non-recurring charges and provision of Rs 368 million for Q4 FY04 as follows.
- Charge of Rs 115 million relating to the AmVaz Project,
- Provision of Rs 184 million relating to the Government of India price notification court case on norfloxacin,
- Charge of Rs 58 million relating to the divestment of Compact Electric Limited and
- Charge of Rs 11 million relating to impairment of assets
Key Highlights
- Revenues at Rs 4.8 billion as against Rs 4.3 billion in Q4 FY03; YoY growth of 12%.
- Revenues in India at Rs 1.6 billion as against Rs 1.3 billion in Q4 FY03; YoY growth of 21%. This increase was driven by the performance of APIs as well as Branded Formulations segment.
- Revenues outside India at Rs 3.2 billion as against Rs 2.9 billion in Q4 FY03; YoY growth of 7%.
- Revenues in Europe at Rs 781 million as against Rs 458 million in Q4 FY03; YoY growth of 71%. This growth was primarily driven by bulk active ramipril, which contributed Rs 393 million to the revenues. The Company also launched generic amlodipine maleate in the UK market in the last week of March 2004, which recorded revenues of Rs 18 million.
- Revenues in the Generics segment at Rs 840 million as against Rs 1.2 billion in Q4 FY03. Combined revenues from fluoxetine capsules 40mg and tizanidine tablets 2 & 4 mg were at Rs 349 million as against Rs 657 million in Q4 FY 03. This decline was primarily on account of increased competition.
- Gross Margins on total revenues at 52% of total revenues. This compares with gross margins of 63% in Q4 FY03. The lower revenues in generics segment have affected the gross margins in Q4 FY04. Further, the gross margins in Q4 FY03 included a favorable impact of reclassification of certain export benefits.
- R&D investments increased by 32% to Rs 659 million as against Rs 501 million in Q4 FY03. As a % of revenues, R&D expenditure is at 14% as against 12% in Q4 FY03.
- Company commenced it's first clinical trial program outside India on DRF 10945 (predominantly PPAR alpha agonist) in Canada.
- Company filed 6 Drug Master Files (DMFs) and
- Company submitted 4 ANDAs, all non-para IV filings.
General information
The following items were considered and adopted by the Board of Directors of Dr. Reddy's Laboratories today:
- Audited financial results for the year ended March 31, 2004 as required under Clause 41 of the listing agreement.
- Board of Directors have recommended a Final dividend of Rs. 5 per share subject to approval of shareholders.
About Dr. Reddy's
Established in 1984, Dr. Reddy's Laboratories (NYSE: RDY) is an emerging global pharmaceutical company with proven research capabilities. The Company is vertically integrated with a presence across the pharmaceutical value chain. It produces finished dosage forms, active pharmaceutical ingredients and biotechnology products and markets them globally, with focus on India, US, Europe and Russia. The Company conducts research in the areas of cancer, diabetes, cardiovascular, inflammation and bacterial infection.
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:
Nikhil Shah at nikhilshah@drreddys.com or on +91-40-55511532
Media: Pratap Antony at pratapa@drreddys.com or on +91-40-55511634 or
R Rammohan at rammohanr@drreddys.com or on +91-40-55511620. |
