Dr. Reddy's Laboratories Ltd. RDY today announced its consolidated financial results for the fourth quarter and full year ended March 31, 2016 under International Financial Reporting Standards (IFRS).
FY16: Key Highlights
- Received two final approvals and one tentative approval of the NDAs filed by the Proprietary Products Business. Zembrace launched in April 2016.
- Consolidated revenues at Rs. 154.7 billion, year-on-year growth of 4%.
- Gross Profit Margin at 59.6%, improved by ~200 bps over last year.
- Research & Development (R&D) spend at Rs. 17.8 billion, 11.5% of revenues. Continued focus on building complex generics and differentiated products pipeline.
- EBITDA at Rs. 36.3 billion, 23.4% of revenues. Adjusted* EBITDA at 26.7% of revenues, year-on-year growth of 11%.
- Profit after tax at Rs. 20.0 billion. Diluted EPS at Rs. 117.
Q4 FY16: Key Highlights
- Consolidated revenues at Rs. 37.6 billion, year-on-year decline of 3%
- EBITDA at Rs. 4.8 billion, 12.8% of revenues. Adjusted* EBITDA at 24.0% of revenues.
Commenting on the company's fourth quarter results, Co-chairman and CEO, G V Prasad said, "It's been a challenging quarter for Dr. Reddy's. While there has been a marginal decline in revenues, there has been a greater impact on profitability. This is mainly due to the provision, made as a matter of abundant precaution, to write down our outstanding receivables from Venezuela. We will continue to actively engage with the Venezuelan Government to provide affordable medicine to fulfill the need of people of the country, subject to repatriation of funds.
"Our Bio-similars business is gaining traction, as we have started to receive approvals and build partnerships for our products in the emerging markets. Our topmost priority continues to be the strengthening of our quality management processes across the organisation."
* Adjusted for impact of devaluation and translation, on certain monetary assets and liabilities of our Venezuela subsidiary
All amounts in millions, except EPS |
All US dollar amounts based on convenience translation rate of 1 USD = Rs. 66.25 |
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Dr. Reddy's Laboratories Limited and Subsidiaries | ||||||||||||||||||||||||||||
Consolidated Income Statement | ||||||||||||||||||||||||||||
Particulars | FY 16 | FY 15 | Growth % | |||||||||||||||||||||||||
($) |
(Rs.) |
% | ($) |
(Rs.) |
% | |||||||||||||||||||||||
Revenues | 2,335 | 1,54,708 | 100.0 | 2,237 | 1,48,189 | 100.0 | 4 | |||||||||||||||||||||
Cost of revenues | 942 | 62,427 | 40.4 | 948 | 62,786 | 42.4 | (1 | ) | ||||||||||||||||||||
Gross profit | 1,393 | 92,281 | 59.6 | 1,289 | 85,403 | 57.6 | 8 | |||||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||
Selling, general & administrative expenses | 690 | 45,702 | 29.5 | 643 | 42,585 | 28.7 | 7 | |||||||||||||||||||||
Research and development expenses | 269 | 17,834 | 11.5 | 263 | 17,449 | 11.8 | 2 | |||||||||||||||||||||
Other operating expense / (income) | (13 | ) | (874 | ) | (0.6 | ) | (14 | ) | (917 | ) | (0.6 | ) | (5 | ) | ||||||||||||||
Results from operating activities | 447 | 29,619 | 19.1 | 397 | 26,286 | 17.7 | 13 | |||||||||||||||||||||
Finance expense / (income), net | 41 | 2,708 | 1.8 | (25 | ) | (1,682 | ) | (1.1 | ) | NM | ||||||||||||||||||
Share of (profit) of equity accounted investees, net of income tax | (3 | ) | (229 | ) | (0.1 | ) | (3 | ) | (195 | ) | (0.1 | ) | 18 | |||||||||||||||
Profit before income tax | 410 | 27,140 | 17.5 | 425 | 28,163 | 19.0 | (4 | ) | ||||||||||||||||||||
Income tax expense | 108 | 7,127 | 4.6 | 90 | 5,984 | 4.0 | 19 | |||||||||||||||||||||
Profit for the period | 302 | 20,013 | 12.9 | 335 | 22,179 | 15.0 | (10 | ) | ||||||||||||||||||||
Diluted EPS | 1.77 | 117 | 1.96 | 130 | (10 | ) | ||||||||||||||||||||||
EBITDA Computation |
||||||||||||||||
Particulars | FY 16 | FY 15 | ||||||||||||||
($) |
(Rs.) |
($) |
(Rs.) |
|||||||||||||
Profit before tax | 410 | 27,140 | 425 | 28,163 | ||||||||||||
Interest (income) / expense net* | (22 | ) | (1,425 | ) | (11 | ) | (724 | ) | ||||||||
Depreciation | 104 | 6,874 | 86 | 5,719 | ||||||||||||
Amortization | 52 | 3,469 | 36 | 2,381 | ||||||||||||
Impairment | 2.9 | 194 | 9.5 | 629 | ||||||||||||
EBITDA | 547 | 36,252 | 546 | 36,168 | ||||||||||||
EBITDA (% to sales) | 23.4 | 24.4 | ||||||||||||||
Adjusted** EBITDA (% to sales) | 26.7 | 25.0 |
* Includes income from investments
**Venezuela adjustment
The Company has not received
approvals from the Venezuelan government to repatriate any amount beyond
USD 4 million already received during the year. The Company believes
that in the interim, it is appropriate to use the DICOM rate (i.e. 272.5
VEF per USD) instead of official ‘preferential' rate (i.e. 10 VEF per
USD) for translating the monetary assets and liabilities of the
Venezuelan subsidiary as at 31 March 2016. Accordingly, the resultant
impact for Q4 FY 16 and Fiscal 2016 is Rs. 4,309 million and Rs. 5,085
million respectively. Similar charge on account of translation of net
monetary assets was Rs. 843 million accrued in Q4 FY 15.
All amounts in millions, except EPS |
All US dollar amounts based on convenience translation rate of 1 USD = Rs. 66.25 |
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Key Balance Sheet Items |
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Particulars | As on 31st Mar 16 | As on 31st Mar 15 | ||||||||||||
($) |
(Rs.) |
($) |
(Rs.) |
|||||||||||
Cash and cash equivalents and Other current Investments | 603 | 39,955 | 599 | 39,654 | ||||||||||
Trade receivables | 623 | 41,306 | 615 | 40,755 | ||||||||||
Inventories | 386 | 25,578 | 385 | 25,529 | ||||||||||
Property, plant and equipment | 815 | 53,961 | 726 | 48,090 | ||||||||||
Goodwill and Other Intangible assets | 372 | 24,644 | 248 | 16,430 | ||||||||||
Loans and borrowings (current & non-current) | 506 | 33,513 | 651 | 43,125 | ||||||||||
Trade payables | 186 | 12,300 | 161 | 10,660 | ||||||||||
Equity | 1,937 | 1,28,336 | 1,680 | 1,11,302 | ||||||||||
Revenue Mix by Segment |
|||||||||||||||||||||||
Particulars | FY 16 | FY 15 | Growth % | ||||||||||||||||||||
($) |
(Rs.) |
% | ($) |
(Rs.) |
% | ||||||||||||||||||
Global Generics | 1,933 | 1,28,062 | 83 | 1,802 | 1,19,397 | 81 | 7 | ||||||||||||||||
North America | 75,445 | 63,564 | 19 | ||||||||||||||||||||
Europe* | 7,732 | 6,482 | 19 | ||||||||||||||||||||
India | 21,293 | 17,870 | 19 | ||||||||||||||||||||
Emerging Markets# | 23,592 | 31,482 | -25 | ||||||||||||||||||||
PSAI | 338 | 22,379 | 14 | 384 | 25,456 | 17 | -12 | ||||||||||||||||
North America | 3,052 | 4,605 | -34 | ||||||||||||||||||||
Europe | 9,313 | 10,507 | -11 | ||||||||||||||||||||
India | 2,618 | 3,288 | -20 | ||||||||||||||||||||
Rest of World | 7,396 | 7,056 | 5 | ||||||||||||||||||||
Proprietary Products & Others | 64 | 4,267 | 3 | 50 | 3,336 | 2 | 28 | ||||||||||||||||
Total | 2,335 | 1,54,708 | 100 | 2,237 | 1,48,189 | 100 | 4 |
* Europe primarily includes Germany, UK and out licensing sales
business
# Emerging Markets refers to Russia, other CIS countries,
Romania and Rest of the World markets including Venezuela
Note: Effective Q1 FY 16, there was a change in the monitoring of performance of one product from Global Generics to Proprietary Products. Consequently, revenues and related costs of this product for the previous periods have been reclassified to conform to such change.
Segmental Analysis
Global Generics
Revenues from Global Generics segment for FY16 are at Rs. 128.1 billion, year-on-year growth of 7%; primarily driven by North America, Europe and India.
-
Revenues from North America for FY16 at Rs. 75.4 billion,
year-on-year growth of 19%. Growth primarily on account of sustained
performance of the injectable franchise and market share gains in key
molecules. Habitrol integration in line with the expectation and focus
is on expanding the franchise.
14 new generics filings in the US during the year (13 ANDAs and 1 NDA). Cumulatively, 82 generic filings are pending for approval with the USFDA (79 ANDAs and 3 NDAs under 505(b)(2) route). Of these 79 ANDAs, 52 are Para IVs out of which we believe 18 have ‘First to File' status. -
Revenues from Emerging Markets for FY16 at Rs. 23.6 billion,
year-on-year decline of 25%.
- Revenues from Russia at Rs. 10.6 billion, year-on-year decline of 29% primarily on account of depreciation of rouble. In constant currency revenues grew by 1% year-on-year.
- Revenues from other CIS countries and Romania market at Rs. 3.5 billion, year-on-year growth of 1%.
- Revenues from Rest of World (RoW) territories at Rs. 9.4 billion, year-on-year decline of 28% primarily on account of calibrated sales in Venezuela.
-
Revenues from India for FY16 at Rs. 21.3
billion, year-on-year growth of 19%.
- Continued momentum of mega brands.
- Portfolio acquired from UCB well-integrated and performance inline with expectations. Normalizing for contribution from the UCB portfolio, growth of the base business during the year is healthy.
- Revenues from Europe for FY16 at Rs. 7.7 billion, year-on-year growth of 19%. Growth was primarily driven by aripiprazole and pregabalin.
Pharmaceutical Services and Active Ingredients (PSAI)
- Revenues from PSAI at Rs. 22.4 billion, year-on-year decline of 12%.
- During the year, 50 DMFs were filed globally of which 8 were in the US. The cumulative number of DMF filings as of March 31, 2016 was 768.
Income Statement Highlights:
- Gross profit margin at 59.6% and improved by ~200 bps over that of previous year. Gross profit margin for Global Generics (GG) and PSAI business segments are at 65.9% and 22.0% respectively.
- SG&A expenses at Rs. 45.7 billion, year-on-year growth of 7%. This increase is largely due to the ongoing remediation activities related to the USFDA's observations, settlement of patent litigation on zoledronic acid, launch related activities of the Proprietary Products business and certain routine items related to manpower and other spends.
- Research & development expenses at Rs. 17.8 billion. 11.5% of revenues in FY16 as compared to 11.8% in FY15. Continued focus on building complex generics and differentiated products pipeline.
-
Net Finance expense at Rs. 2,708 million in FY 16 compared to the net
finance income of Rs. 1,681 million in FY15. The incremental charge of
Rs. 4,389 million is on account of:
- Increase in the net interest income by Rs. 701 million
- Net foreign exchange loss of Rs. 4,133 million in FY 16 vs net foreign exchange gain of Rs. 958 million in FY 15. Current year's foreign exchange loss is primarily on account of Venezuela related adjustments as detailed above.
- Profit after Tax at Rs. 20.0 billion.
- Diluted earnings per share is at Rs. 117.
- Capital expenditure is at Rs. 11.9 billion.
The board has recommended payment of a dividend of Rs. 20 per equity share of face value Rs. 5/- each (400% of face value) for the year ended March 31, 2016 subject to approval of members.
All amounts in millions, except EPS |
All US dollar amounts based on convenience translation rate of 1 USD = Rs. 66.25 |
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Dr. Reddy's Laboratories Limited and Subsidiaries | ||||||||||||||||||||||||||
Consolidated Income Statement | ||||||||||||||||||||||||||
Particulars | Q4 FY 16 | Q4 FY 15 | Growth % | |||||||||||||||||||||||
($) |
(Rs.) |
% | ($) |
(Rs.) |
% | |||||||||||||||||||||
Revenues | 567 | 37,562 | 100.0 | 584 | 38,704 | 100.0 | (3 | ) | ||||||||||||||||||
Cost of revenues | 246 | 16,286 | 43.4 | 264 | 17,483 | 45.2 | (7 | ) | ||||||||||||||||||
Gross profit | 321 | 21,276 | 56.6 | 320 | 21,221 | 54.8 | 0 | |||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||
Selling, general & administrative expenses | 176 | 11,632 | 31.0 | 152 | 10,082 | 26.0 | 15 | |||||||||||||||||||
Research and development expenses | 74 | 4,879 | 13.0 | 78 | 5,144 | 13.3 | (5 | ) | ||||||||||||||||||
Other operating expense / (income) | -5 | -307 | (0.8 | ) | -2 | -125 | (0.3 | ) | 145 | |||||||||||||||||
Results from operating activities | 77 | 5,072 | 13.5 | 92 | 6,120 | 15.8 | (17 | ) | ||||||||||||||||||
Finance expense / (income), net | 40 | 2,646 | 7.0 | 4 | 233 | 0.6 | NM | |||||||||||||||||||
Share of (profit) of equity accounted investees, net of income tax | -1 | -59 | (0.2 | ) | -1 | -43 | (0.1 | ) | 36 | |||||||||||||||||
Profit before income tax | 38 | 2,485 | 6.6 | 90 | 5,930 | 15.3 | (58 | ) | ||||||||||||||||||
Income tax expense | 26 | 1,739 | 4.6 | 11 | 742 | 1.9 | 134 | |||||||||||||||||||
Profit for the period | 11 | 746 | 2.0 | 78 | 5,188 | 13.4 | (86 | ) | ||||||||||||||||||
Diluted EPS | 0.07 | 4.4 | 0.46 | 30.4 | (86 | ) | ||||||||||||||||||||
EBITDA Computation |
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Particulars | Q4 FY 16 | Q4 FY 15 | ||||||||||||||
($) |
(Rs.) |
($) |
(Rs.) |
|||||||||||||
Profit before tax | 38 | 2,485 | 90 | 5,930 | ||||||||||||
Interest (income) / expense net* | (11 | ) | (713 | ) | (3 | ) | (194 | ) | ||||||||
Depreciation | 31 | 2,062 | 23 | 1,530 | ||||||||||||
Amortization | 15 | 970 | 11 | 699 | ||||||||||||
Impairment | - | - | 1.4 | 95 | ||||||||||||
EBITDA | 73 | 4,804 | 122 | 8,061 | ||||||||||||
EBITDA (% to sales) | 12.8 | 20.8 | ||||||||||||||
Adjusted** EBITDA (% to sales) | 24.0 | 23.0 | ||||||||||||||
* Includes income from investments
**Venezuela adjustment for
current and previous period as explained in details above
All amounts in millions, except EPS |
All US dollar amounts based on convenience translation rate of 1 USD = Rs. 66.25 |
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Particulars | Q4 FY 16 | Q4 FY 15 | Growth % | ||||||||||||||||||||
($) |
(Rs.) |
% | ($) |
(Rs.) |
% | ||||||||||||||||||
Global Generics | 465 | 30,774 | 82 | 464 | 30,717 | 80 | 0 | ||||||||||||||||
North America | 18,950 | 16,879 | 12 | ||||||||||||||||||||
Europe* | 1,759 | 2,145 | -18 | ||||||||||||||||||||
India | 5,267 | 4,744 | 11 | ||||||||||||||||||||
Emerging Markets# | 4,799 | 6,949 | -31 | ||||||||||||||||||||
PSAI | 87 | 5,766 | 15 | 112 | 7,415 | 19 | -22 | ||||||||||||||||
North America | 742 | 1,866 | -60 | ||||||||||||||||||||
Europe | 2,585 | 2,639 | -2 | ||||||||||||||||||||
India | 603 | 669 | -10 | ||||||||||||||||||||
Rest of World | 1,835 | 2,241 | -18 | ||||||||||||||||||||
Proprietary Products & Others | 15 | 1,022 | 3 | 8 | 572 | 1 | 79 | ||||||||||||||||
Total | 567 | 37,562 | 100 | 584 | 38,704 | 100 | -3 | ||||||||||||||||
Earnings Call Details (06.30 pm IST, May 12, 2016)
The Company will host an earnings call at 06.30 pm IST on May 12, 2016, to discuss the performance and answer any questions from participants. This call will be accessible through an audio dial-in and a web-cast.
Audio conference Participants can dial-in on the numbers below
Primary number: |
91 22 3960 0616 |
|||
Secondary number: |
91 22 6746 5826 |
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International Toll Free Number |
USA |
18667462133 |
||
UK |
08081011573 |
|||
Singapore |
8001012045 |
|||
Hong Kong |
800964448 |
|||
Playback of call: |
91 22 3065 2322, 91 22 6181 3322 |
|||
Conference ID: |
375# |
|||
Web-cast |
More details will be provided through our website, www.drreddys.com |
Transcript of the event will be available at www.drreddys.com. Playback will be available for a few days.
About Dr. Reddy's: Dr. Reddy's Laboratories Ltd. RDY is an integrated pharmaceutical company, committed to providing affordable and innovative medicines for healthier lives. Through its three businesses – Pharmaceutical Services & 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. Our major therapeutic areas of focus are gastro-intestinal, cardiovascular, diabetology, oncology, pain management and anti-infectives. Dr. Reddy's operates in markets across the globe. Our major markets include – USA, Russia & CIS, Venezuela and India. For more information, log on to: www.drreddys.com
Disclaimer: This press release may include statements of future expectations and other forward-looking statements that are based on the management's current views and assumptions and involve known or unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words "may," "will," "should," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" and similar expressions identify forward-looking statements. Actual results, performance or events may differ materially from those in such statements due to without limitation, (i) general economic conditions such as performance of financial markets, credit defaults, currency exchange rates, interest rates, persistency levels and frequency/severity of insured loss events, (ii) mortality and morbidity levels and trends, (iii) changing levels of competition and general competitive factors, (iv) changes in laws and regulations and in the policies of central banks and/or governments, and (v) the impact of acquisitions or reorganisation, including related integration issues.
The company assumes no obligation to update any information contained herein.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160512005578/en/
Dr. Reddy's Laboratories Ltd.
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