Dr. Reddy's Q2 & H1 FY13 Financial Results

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Dr. Reddy's Q2 & H1 FY13 Financial Results

Q2 FY13 Revenues at Rs. 28.8 billion(YoY growth of 27%)

Q2 FY13 EBITDA at Rs. 7.7 billion(YoY growth of 47%)


*Adjusted Q2 FY13 PAT at Rs. 4.9 billion(YoY growth of 77%)

H1 FY13 Revenues at Rs. 54.2 billion(YoY growth of 28%)

H1 FY13 EBITDA at Rs. 12.7 billion(YoY growth of 35%)

**Adjusted H1 FY13 PAT at Rs. 7.8 billion(YoY growth of 56%)

HYDERABAD, India--(BUSINESS WIRE)-- Dr. Reddy's Laboratories Ltd. (NYS: RDY) today announced its unaudited consolidated financial results for the quarter ended September 30, 2012 under International Financial Reporting Standards (IFRS).

Key Highlights (Q2 FY13)

  • Consolidated revenues for Q2 FY13 at Rs. 28.8 billion, recorded YoY growth of 27%. Consolidated revenues for H1 FY13 at Rs. 54.2 billion, recorded YoY growth of 28%.
    • Revenues from the Global Generics segment for Q2 FY13 at Rs. 20.1 billion, recorded YoY growth of 25% primarily driven by North America, India and other emerging markets.
    • Revenues from the PSAI segment for Q2 FY13 at Rs. 7.9 billion, recorded YoY growth of 33%.
  • EBITDA for Q2 FY13 at Rs. 7.7 billion, 27% of revenues, recorded YoY growth of 47%. EBITDA for H1 FY13 at Rs. 12.7 billion, 23% of revenues, recorded YoY growth of 35%.
  • PAT for Q2 FY13 at Rs. 4.1 billion, 14% of revenues, recorded YoY growth of 32%. PAT for H1 FY13 at Rs. 7.4 billion, 14% of revenues, recorded YoY growth of 30%.
  • *Adjusted PAT for Q2 FY13 at Rs. 4.9 billion, 17% of revenues, recorded YoY growth of 77%.
  • During the quarter, the company launched 18 new generic products, filed 11 new product registrations and filed 10 DMFs globally.

* Adjusted for (a) impairment charges in Q2 FY13 (b) the benefit on reversal of provision for voluntary retirement scheme ('VRS') in Q2 FY12 and (c) tax normalization on account of the annual effective tax rate and the aforementioned adjustments

** Adjusted for (a) impairment charges in Q2 FY13 (b) net charge for voluntary retirement scheme('VRS') and (c) tax normalization on account of the annual effective tax rate and the aforementioned adjustments

All figures in millions, except EPS

  

All US dollar figures based on convenience translation rate of 1USD = Rs. 52.92

 
Dr. Reddy's Laboratories Limited and Subsidiaries
Unaudited Consolidated Income Statement
    
ParticularsQ2 FY13Q2 FY12

 

  ($)  

(Rs.)

  %   ($)  

(Rs.)

  %   

Growth %

Revenues544  28,809  100429  22,678  10027
Cost of revenues  255   13,504   47   198   10,473   46   29 
Gross profit  289   15,305   53   231   12,205   54   25 
Operating Expenses
Selling, general and administrative expenses1518,013281367,2173211
Research and development expenses331,7596281,459621
Impairment loss on goodwill and intangible assets136882
Other operating (income) / expense  (8)  (397)  (1)  (4)  (216)  (1)  85 
Results from operating activities  99   5,242   18   71   3,745   17   40 
Net finance (income) / expense(7)(371)(1)1500(849)
Share of (profit) / loss of equity accounted investees  (1)  (28)  (0)  (0)  (13)  (0)  115 
Profit before income tax ('PBT')  107   5,641   20   70   3,708   16   52 
Income tax expense  30   1,567   5   12   630   3   148 
Profit for the period  77   4,074   14   58   3,078   14   32 
                      
Diluted EPS  0.5   23.9      0.3   18.1      32 
 

Profit Computation:

EBITDA Computation  Q2 FY13  Q2 FY12
  ($)  

(Rs.)

  ($)  

(Rs.)

PBT107  5,64170  3,708
Net Interest Expenses / (Income)(1)(32)4225
Depreciation1894317879
Amortization84337389
Impairment  13   688       
Reported EBITDA  145   7,673   98   5,201 
Adjustments of exceptional items:
Part reversal of provision booked in Q1 FY12 for VRS        (2)  (94)
Adjusted EBITDA  145   7,673   97   5,107 
 
 
PAT ComputationQ2 FY13Q2 FY12
  ($)  

(Rs.)

  ($)  

(Rs.)

PAT774,074583,078
Adjustments:
Part reversal of provision booked in Q1 FY12 for VRS(2)(94)
Impairment loss on goodwill and intangible assets13688
Tax adjustment*  3   175   (4)  (192)
Adjusted PAT  93   4,937   53   2,792 
 

* Q2 FY13 normalized to the FY13 annual effective tax rate and Q2 FY12 normalized to the FY12 annual effective tax rate and the effect of the aforementioned adjustments

Segmental Analysis

Global Generics

Revenues from Global Generics segment for Q2 FY13 at Rs. 20.1 billion, recorded YoY growth of 25% driven by key markets of North America, India and other emerging markets.

  • Revenues from North America for Q2 FY13 at Rs. 9.3 billion, recorded YoY growth of 47%.
    • Growth is largely driven by key limited competition products of ziprasidone, tacrolimus, fondaparinux, clopidogrel, ramp-up in antibiotics portfolio and products from Shreveport facility.
    • 4 new products were launched during the quarter - atorvastatin, metoprolol, montelukast family and amoxicillin.
    • 30 products from the prescription portfolio are ranked among the Top 3 in their respective market shares. (Source: IMS Health Volumes, August 2012)
    • During the quarter, 4 ANDAs were filed. Cumulatively, 63 ANDAs are pending for approval with the USFDA of which 33 are Para IVs and 7 have 'First To File' status.
  • Revenues from Russia and Other CIS markets for Q2 FY13 at Rs. 3.8 billion recorded YoY growth of 14%.
    • Revenues from Russia for Q2 FY13 are at Rs. 3.2 billion.
    • Revenues from Other CIS markets for Q2 FY13 at Rs. 0.62 billion recorded YoY growth of 31%.
  • Revenues from India forQ2 FY13 at Rs. 3.9 billion recorded YoY growth of 12%.
    • Growth driven by volume increase across most key brands.
    • Biosimilars portfolio grew YoY by 24% during the quarter.
    • 4 new brands were launched during the quarter.
  • Revenues from Europe for Q2 FY13 at Rs. 1.8 billion declined YoY by 16%.
    • Revenues from Germany forQ2 FY13 at Rs. 1.1 billion declined YoY by 11%.

Pharmaceutical Services and Active Ingredients (PSAI)

  • Revenues from PSAI for Q2 FY13 at Rs. 7.9 billion, recorded YoY growth of 33%.
  • During the quarter, 10 DMFs were filed globally, including 2 in Europe. The cumulative number of DMF filings as of September 30, 2012 is 552.

Income Statement Highlights:

  • Gross profit margin at 53.1% in Q2 FY13 marginally dropped by 0.7% versus Q2 FY12. Gross profit margin for Global Generics and PSAI business segments are at 59.4% and 35.8% respectively.
  • Selling, General and Administration (SG&A) expenses including amortization at Rs. 8 billion increased YoY by 11%.
  • Research & development expenses for Q2 FY13 at Rs. 1.8 billion is at 6% of revenues.
  • During the quarter, a non-recurring and non-cash impairment charge of Rs. 688 million pertaining to product intangibles in generics portfolio and a goodwill charge wrt Italian operations has been considered.
  • Net Finance income is at Rs. 371 million, in Q2 FY13 compared to the net finance cost of Rs. 50 million in Q2 FY12. The change is on account of:
    • Net incremental forex gain of Rs. 187 million, primarily on account of reversal of the loss on time value of options recorded in Q1 FY13, due to the recent appreciation in the rupee.
    • Net interest income of Rs. 33 million in Q2 FY13 compared to net interest expense of Rs. 225 million in Q2 FY12 primarily on account of higher interest income from Fixed Deposit and mutual funds.
  • EBITDA for Q2 FY13 is Rs. 7.7 billion, 27% of revenues and recorded YoY growth of 47%. This growth is supported by the increased operating leverage.
  • Profit after Tax in Q2 FY13 at Rs. 4.1 billion recorded YoY growth of 32%.
  • *Adjusted Profit after tax in Q2 FY13 at Rs. 4.9 billion recorded YoY growth of 77%.
  • Diluted earnings per share in Q2 FY13 are Rs. 23.9.
  • Capital expenditure for Q2 FY13 is Rs. 1.8 billion.

* Adjusted for (a) impairment charges in Q2 FY13 (b) the benefit on reversal of provision for voluntary retirement scheme ('VRS') in Q2 FY12 and (c) tax normalization on account of the annual effective tax rate and the aforementioned adjustments

All US dollar figures based on convenience translation rate of 1USD = Rs. 52.92

Appendix 1:Key Balance Sheet Items

(in millions)

Particulars  As on 30th Sep 12  As on 30th Jun 12
  ($)  

(Rs.)

  ($)  

(Rs.)

Cash and cash equivalents  390   20,641  403   21,353
Trade receivables  496   26,247  472   24,975
Inventories  414   21,885  389   20,580
Property, plant and equipment  667   35,300  653   34,550
Goodwill and Other Intangible assets  233   12,297  257   13,597
Loans and borrowings (current & non current)  660   34,901  670   35,430
Trade payables   Read Full Story

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