Dr. Reddy's Laboratories Ltd. (NYSE:RDY) today announced its unaudited financial results for the quarter ended June 30, 2010 under International Financial Reporting Standards (IFRS).
Key Highlights
- Consolidated revenues are at Rs. 16.8 billion ($363 million) in Q1 FY11 versus Rs. 18.2 billion ($392 million) in Q1 FY10. Excluding the revenues from sumatriptan in the previous year, the year-on-year growth is 4%.
- Revenues from Global Generics for Q1 FY11 are at Rs. 11.9 billion ($257 million). Excluding the revenues from sumatriptan, the year-on-year growth is 9%.
- Revenues from PSAI are at Rs. 4.5 billion ($97 million) in Q1 FY11.
- Profit before Tax for Q1 FY11 is at Rs. 2.5 billion ($53 million).
- EBITDA of Rs. 3.4 billion ($74 million) in Q1 FY11, represents 20% to revenues.
- Profit after Tax for Q1 FY11 is at Rs. 2.1 billion ($45 million).
- During the quarter, the company launched 32 new generic products, filed 26 new product registrations and filed 3 DMFs globally.
- During the quarter, Dr. Reddy's transferred dossiers and trademarks for nine currently marketed products in Brazil to GSK, for a consideration of $4 million. The agreement also provides for additional consideration towards other products in the pipeline based on specified milestones. The milestone payments under this deal will be recognized as revenue over the term of the product supply agreement.
Segmental Analysis
Global Generics
Revenues from Global Generics segment are at Rs. 11.9 billion ($257 million) in Q1 FY11. Excluding the revenues from sumatriptan in the US, the growth is 9%.
- Revenues from North America at Rs. 3.9 billion ($84 million) in Q1 FY11 versus Rs. 6.0 billion ($130 million) in Q1 FY10. Excluding the revenues from sumatriptan, the growth is 5% in dollar currency.
- As at June 30, 2010, total cumulative ANDA filings are 163. Total ANDAs pending approval at the USFDA are 71 of which 36 are Para IVs and 12 are FTFs.
- Revenues from Europe at Rs. 1.9 billion ($42 million) in Q1 FY11 versus Rs. 2.1 billion ($45 million) in Q1 FY10.
- Revenues from Germany decrease by 18% to Rs. 1.3 billion ($28 million) in Q1 FY11. For the same period the decline in Euro currency is 6%.
- Revenues from Rest of Europe grew by 29% to Rs. 516 million ($11 million) in Q1 FY11 largely led by the 21% growth in UK.
- Revenues from Russia & Other CIS markets at Rs. 2.6 billion ($55 million) in Q1 FY11 versus Rs. 1.9 billion ($40 million) in Q1 FY10, or a growth of 36%.
- Revenues in Russia at Rs. 2.1 billion ($44 million) in Q1 FY11 versus Rs. 1.5 billion ($33 million) in Q1 FY10 or a year-on-year growth of 35%.
- Dr. Reddy's year-on-year secondary prescription sales growth stands at 33% versus industry's growth of 21%. (Source: Pharmexpert April-May 2010)
- Revenues in Other CIS markets increase by 43% to Rs. 489 million ($11 million) in Q1 FY11 versus Rs. 342 million ($7 million) in Q1 FY10.
- Revenues in India at Rs. 2.8 billion ($60 million) in Q1 FY11 versus Rs. 2.4 billion ($52 million) in Q1 FY10, a growth of 16% which is largely led by volume growth of existing products.
- Dr. Reddy's year-on-year secondary prescription sales growth is 22% versus industry's growth of 20%. (Source: ORG IMS MAT Jun 2010)
- 11 new products launched during the quarter.
Pharmaceutical Services and Active Ingredients (PSAI)
Revenues from PSAI are at Rs. 4.5 billion ($97 million) in Q1 FY11.
- During the quarter, 3 DMFs were filed globally. The cumulative DMF filings as of Jun 10 are 378.
Income Statement Highlights:
- Gross profit at Rs. 8.9 billion ($192 million) in Q1 FY11 at a margin of 53% to revenues versus 56% in Q1 FY10. This change in gross margin is largely on account of a favorable mix of high margin revenues from sumatriptan in the previous year.
- Selling, General & Administration (SG&A) expenses excluding amortization for the quarter is at Rs. 5.2 billion ($112 million) or a decline of 4% over the previous year. Excluding the one-time charges recorded on account of betapharm workforce restructure costs of Rs. 496 million ($11 million) and the closure of Atlanta facility of Rs. 71 million ($2 million) in the previous year, SG&A grew by 7%.
- Amortization expenses for the quarter is at Rs. 288 million ($6 million) versus Rs. 507 million ($11 million) in Q1 FY10. This decline is on account of the impairment of intangibles recorded in Q3 FY10.
- Other Operating Income of Rs. 186 million ($4 million) in Q1 FY11 versus Rs. 35 million ($1 million) in Q1 FY10.
- R&D expenses at Rs. 993 million ($21 million) in Q1 FY11.
- Finance costs (net) are at Rs. 177 million ($4 million) in Q1 FY11 versus Rs. 135 million ($3 million) in Q1 FY10. The change is mainly on account of higher forex loss during the quarter
- Net forex loss of Rs. 225 million ($5 million) in Q1 FY11 versus Rs. 84 million ($2 million) in Q1 FY10.
- EBITDA at Rs. 3.4 billion ($74 million) in Q1 FY11 represents 20% to sales.
- Net Profit after Tax for Q1 FY11 is at Rs. 2.1 billion ($45 million).
- Diluted EPS is at Rs. 12.3 ($0.3) for the quarter.
- Capital expenditure for the quarter is at Rs. 1.9 billion ($40 million).