Dr. Reddy's Q3 & 9 Months FY13 Financial Results

Dr. Reddy's Q3 & 9 Months FY13 Financial Results

Q3 FY13 Revenues at Rs. 28.7 billion

(YoY growth of 23%)#


Q3 FY13 EBITDA at Rs. 6.0 billion

*Adjusted Q3 FY13 PAT at Rs. 3.6 billion

9 months FY13 Revenues at Rs. 82.9 billion

(YoY growth of 26%)#

9 months FY13 EBITDA at Rs. 18.6 billion

**Adj 9 months FY13 PAT at Rs. 11.3 billion

HYDERABAD, India--(BUSINESS WIRE)-- Dr. Reddy's Laboratories Ltd. (NYS: RDY) today announced its unaudited consolidated financial results for the quarter ended December 31, 2012 under International Financial Reporting Standards (IFRS).

Key Highlights (Q3 FY13)

  • Consolidated revenues for Q3 FY13 at Rs. 28.7 billion, recorded YoY growth of 23%#. Consolidated revenues for 9 months FY13 at Rs. 82.9 billion, recorded YoY growth of 26%#.

    • Revenues from the Global Generics segment for Q3 FY13 at Rs. 20.8 billion, recorded a YoY growth of 24%# primarily driven by North America and the Emerging market territories.

    • Revenues from the PSAI segment for Q3 FY13 at Rs. 7.1 billion, recorded YoY growth of 28%.

  • EBITDA for Q3 FY13 at Rs. 6.0 billion, 21% of revenues. EBITDA for 9 months FY13 at Rs. 18.6 billion, 22% of the revenues.

  • PAT for Q3 FY13 at Rs. 3.8 billion, 13% of revenues. PAT for 9 months at Rs. 11.1 billion, 13% of revenues.

  • *Adjusted PAT for Q3 FY13 at Rs. 3.6 billion, 13% of revenues.

  • During the quarter, the company launched 17 new products, filed 13 new product registrations and filed 13 DMFs globally.

# Excluding the impact of the olanzapine profit share recorded in Q3 FY12

* Adjusted for tax normalization on account of the annual effective tax rate

** Adjusted for (a) impairment charges in Q2 FY13 and (b) tax normalization on account of the annual effective tax rate.

All figures in millions, except EPS

All US dollar figures based on convenience translation rate of 1USD = Rs. 54.86

Dr. Reddy's Laboratories Limited and Subsidiaries

Unaudited Consolidated Income Statement

Particulars

Q3 FY13

Q3 FY12

($)

(Rs.)

%

($)

(Rs.)

%

Growth %

Revenue

522

28,651

100

505

27,692

100

3

Cost of revenues

247

13,559

47

203

11,117

40

22

Gross profit

275

15,092

53

302

16,575

60

(9)

Operating Expenses

Selling, general & administrative expenses

156

8,571

30

140

7,679

28

12

Research and development expenses

37

2,026

7

28

1,514

5

34

Other operating (income) / expense

(4)

(233)

(1)

(3)

(165)

(1)

41

Results from operating activities

86

4,728

17

138

7,547

27

(37)

Net finance (income) / expense

2

96

0

(3)

(174)

(1)

NC

Share of (profit) / loss of equity accounted investees

(1)

(32)

(0)

(0)

(26)

(0)

23

Profit before income tax

85

4,664

16

141

7,747

28

(40)

Income tax expense

16

882

3

48

2,617

9

(66)

Profit for the period

69

3,782

13

94

5,130

19

(26)

Diluted EPS

0.4

22.20

0.5

30.16

(26)

Profit Computation:

EBITDA Computation

Q3 FY13

Q3 FY12

($)

(Rs.)

($)

(Rs.)

PBT

85

4,664

141

7,747

Net Interest Expenses / (Income)

(0)

(13)

3

155

Depreciation

18

971

16

899

Amortization

7

411

7

408

Reported EBITDA

110

6,033

168

9,209

Adjusted PAT Computation

Q3 FY13

Q3 FY12

($)

(Rs.)

($)

(Rs.)

PAT(reported)

69

3,782

94

5,130

Adjustments:

Tax adjustment*

(3)

(138)

16

852

Adjusted PAT

66

3,644

109

5,982

* Q3 FY13 normalized to the FY13 annual effective tax rate and Q3 FY12 normalized to the FY12 annual effective tax rate

Note: The above presented unaudited consolidated income statement for 3 months ended 31 December 2012 is based on the financial submissions to be made with the US SEC in the form 6K. A charge of Rs 20.4 crs towards fuel surcharge adjustment was accounted in Q2 FY13 after the unaudited results were announced as a subsequent event adjustment since the related judgement of AP High Court was delivered before the filing of Form 6K with US SEC for Q2 FY13 financials. However, in the financials submitted to SEBI this charge has been considered in Q3 FY13 only.

Segmental Analysis

Global Generics

Revenues from Global Generics segment for Q3 FY13 at Rs. 20.8 billion, recorded YoY growth of 24%# driven by key markets of North America and the Emerging market territories.

  • Revenues from North America for Q3 FY13 at Rs. 9.2 billion ($178 Mn), recorded YoY growth of 38%#.

    • Growth is largely driven by key limited competition products of ziprasidone, tacrolimus, fondaparinux and ramp-up in antibiotics portfolio.

    • Continued focus on gaining market shares in new products such as atorvastatin, metoprolol, ibandronate and montelukast granules during the quarter.

    • 31 products from the prescription portfolio are ranked among the Top 3 in their respective market shares. (Source: IMS Health Volumes, November 2012)

    • During the quarter, 4 ANDAs were filed. Cumulatively, 65 ANDAs are pending for approval with the USFDA of which 35 are Para IVs and 8 have 'First To File' status.

  • Revenues from Russia and Other CIS markets for Q3 FY13 at Rs. 4.4 billion recorded YoY growth of 32%.

    • Revenues from Russia for Q3 FY13 at Rs. 3.7 billion recorded YoY growth of 35%, largely aided by seasonal offtake across major brands and new product launches.

    • Revenues from Other CIS markets for Q3 FY13 at Rs. 0.7 billion recorded YoY growth of 19%.

  • Revenues from India forQ3 FY13 at Rs. 3.7 billion recorded YoY growth of 12%.

    • Biosimilars portfolio grew YoY by 47% during the quarter.

    • 8 new brands were launched during the quarter.

  • Revenues from Europe for Q3 FY13 at Rs. 1.9 billion declined YoY by 20%.

Pharmaceutical Services and Active Ingredients (PSAI)

  • Revenues from PSAI for Q3 FY13 at Rs. 7.1 billion, recorded YoY growth of 28%.

  • During the quarter, 13 DMFs were filed globally, including 3 in the US and 1 in Europe. The cumulative number of DMF filings as of December 31, 2012 is 566.

# Excluding the impact of the olanzapine profit share recorded in Q3 FY12

Income Statement Highlights:

  • Gross profit margin is at 53% in Q3 FY13. Gross profit margin for Global Generics and PSAI business segments are at 60% and 29% respectively.

  • Selling, General and Administration (SG&A) expenses for Q3 FY13 including amortization at Rs. 8.6 billion increased YoY by 12%.

  • Research & development expenses for Q3 FY13 at Rs. 2.0 billion is at 7% of revenues.

  • Net Finance expense is at Rs. 96 million, in Q3 FY13 compared to the net finance income of Rs. 174 million in Q3 FY12. The change is on account of:

    • Net decline in the forex benefit primarily on account of the loss on time value of options, due to the recent depreciation in the rupee.

    • Incremental Interest income of Rs. 168 million primarily on account of higher interest income from Fixed Deposit and mutual funds.

  • EBITDA for Q3 FY13 is Rs. 6.0 billion, 21% of revenues.

  • Profit after Tax in Q3 FY13 at Rs. 3.8 billion, 13% of revenues.

  • *Adjusted Profit after tax in Q3 FY13 at Rs. 3.6 billion, 13% of revenues.

  • Diluted earnings per share in Q3 FY13 are Rs. 22.2.

  • Capital expenditure for Q3 FY13 is Rs. 1.5 billion.

* Adjusted for tax normalization on account of the annual effective tax rate

All figures in millions

All US dollar figures based on convenience translation rate of 1USD = Rs. 54.86

Appendix 1:Key Balance Sheet Items

Particulars

As on 31st Dec 12

As on 30th Sep 12

($)

(Rs.)

($)

(Rs.)

Cash and cash equivalents

424

23,264

376

20,641

Trade receivables

490

26,873

478

26,247

Inventories

422

23,169

399

21,885

Property, plant and equipment

659

36,126

643

35,300

Goodwill and Other Intangible assets

226

12,436

224

12,297

Loans and borrowings (current & non current)

672

36,825

636

34,901

Trade payables

200

10,996

190

10,412

Equity

1,217

66,789

1,155

63,354

Appendix 2: Revenue Mix by Segment

Segment

Q3 FY13

Q3 FY12

Growth %

($)

(Rs.)

%

($)

(Rs.)

%

Global Generics

380

20,828

73

388

21,287

77

(2)

North America

9,243

44

11,114

52

(17)

Europe

1,931

9

2,426

11

(20)

India

3,718

18

3,333

16

12

Russia & Other CIS

4,380

21

3,317

16

32

RoW

1,556

7

1,097

5

42

PSAI

130

7,127

25

101

5,563

20

28

North America

1,266

18

1,170

21

8

Europe

2,472

35

1,652

30

50

India

1,268

18

862

15

47

RoW

2,121

30

1,880

34

13

Proprietary Products & Others

13

696

2

15

841

3

(17)

Total

522

28,651

100

505

27,691

100

3

All figures in millions, except EPS

All US dollar figures based on convenience translation rate of 1USD = Rs. 54.86

Appendix 3: Consolidated Income Statement

Particulars

9 months FY13

9 months FY12

Growth %

($)

(Rs.)

%

($)

(Rs.)

%

Revenues

1,510

82,866

100

1,279

70,153

100

18

Cost of revenues

713