Hyderabad, India, July29, 2019: Dr. Reddy’s
Laboratories Ltd. (BSE: 500124 | NSE:DRREDDY | NYSE: RDY) today announced its
consolidated financial results for the quarter ended June30, 2019 under
International Financial Reporting Standards (IFRS).
|
|
|
Revenues
Gross Margin
SG&A expenses
R&D expenses
Profit before Tax
Profit after Tax
|
|
Rs.3,844 Cr
[YoY: 3% Up, QoQ: 4% Dc]
51.7%
[Q1 FY19: 55.7%; Q4 FY19: 52.4%]
Rs.1,207 Cr
[YoY: Flat; QoQ: 3% Dc]
Rs.361 Cr
[9.4% of Revenues]
Rs.850 Cr
[22.1% of Revenues]
Rs.663 Cr
[17.2% of Revenues]
|
Commenting on the
results, CEO and Co-chairman, GV Prasad said “This quarter, we grew in most of
our key markets and hope to continue this momentum with a sharper focus on
performance. We will continue our journey of operational excellence,
cost leadership and innovation across our businesses”.
All amounts in millions, except EPS All US dollar
amounts based on convenience translation rate of I USD = Rs.68.92
Dr. Reddy’s Laboratories Limited and
Subsidiaries
Consolidated Income Statement
|
Particulars
|
Q1 FY20
|
Q1 FY19
|
YoY
Gr % |
Q4 FY19
|
QoQ
Gr% |
|||
|
($)
|
(Rs.)
|
($)
|
(Rs.)
|
($)
|
(Rs.)
|
|||
|
Revenues
|
558
|
38,435
|
540
|
37,207
|
3
|
583
|
40,166
|
(4)
|
|
Cost of Revenues
|
270
|
18,576
|
239
|
16,479
|
13
|
277
|
19,113
|
(3)
|
|
Gross Profit
|
288
|
19,859
|
301
|
20,728
|
(4)
|
305
|
21,053
|
(6)
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
Selling, General & Administrative
expenses
|
175
|
12,065
|
176
|
12,106
|
(0)
|
180
|
12,376
|
(3)
|
|
Research and Development expenses
|
52
|
3,609
|
60
|
4,157
|
(13)
|
53
|
3,662
|
(1)
|
|
Other operating (income)
|
(55)
|
(3,759)
|
(4)
|
(303)
|
1141
|
(5)
|
(330)
|
1038
|
|
Results from operating activities
|
115
|
7,944
|
69
|
4,768
|
67
|
78
|
5,345
|
49
|
|
Net finance (income)
|
(6)
|
(393)
|
(2)
|
(156)
|
152
|
(5)
|
(349)
|
13
|
|
Share of (profit) / loss of equity
accounted investees
|
(2)
|
(163)
|
(1)
|
(83)
|
96
|
(2)
|
(157)
|
4
|
|
Profit before income tax
|
123
|
8,500
|
73
|
5,007
|
70
|
85
|
5,851
|
45
|
|
Income tax expense
|
27
|
1,872
|
6
|
446
|
320
|
22
|
1,507
|
24
|
|
Profit for the period
|
96
|
6,628
|
66
|
4,561
|
45
|
63
|
4,344
|
53
|
|
-
|
-
|
-
|
||||||
|
Diluted Earnings Per Share (EPS)
|
0.58
|
39.91
|
0.40
|
27.45
|
45
|
0.38
|
26.16
|
53
|
|
As % to Revenues
|
Q1 FY20
|
Q1 FY19
|
Q4 FY19
|
|||||
|
Gross
Profit
|
51.7
|
55.7
|
52.4
|
|||||
|
SG&A
|
31.4
|
32.5
|
30.8
|
|||||
|
R&D
|
9.4
|
11.2
|
9.1
|
|||||
|
EBITDA
|
|
29.5
|
|
21.7
|
|
|
22.0
|
|
|
PBT
|
22.1
|
13.5
|
14.6
|
|||||
|
PAT
|
17.2
|
12.3
|
10.8
|
EBITDA Computation
|
Particulars
|
Q1 FY20
|
Q1 FY19
|
Q4 FY19
|
|||||
|
($)
|
(Rs.)
|
($)
|
(Rs.)
|
($)
|
(Rs.)
|
|||
|
Profit before Income Tax
|
123
|
8,500
|
73
|
5,007
|
85
|
5,851
|
||
|
Interest (income) net*
|
(3)
|
(239)
|
(1)
|
(46)
|
(3)
|
(215)
|
||
|
Depreciation#
|
31
|
2,124
|
32
|
2,214
|
31
|
2,136
|
||
|
Amortization#
|
14
|
958
|
13
|
896
|
15
|
1,047
|
||
|
EBITDA
|
165
|
11,343
|
117
|
8,071
|
128
|
8,819
|
||
*
Includes income from Investments #
includes impairment charge
All amounts in millions, except EPS All US dollar
amounts based on convenience translation rate of I USD = Rs.68.92
Key Balance Sheet Items
|
Particulars
|
As on 30th June, 2019
|
As on 31st March, 2019
|
As on 30th
June, 2018
|
|||
|
($)
|
(Rs.)
|
($)
|
(Rs.)
|
($)
|
(Rs.)
|
|
|
Cash and cash equivalents and other
investments
|
413
|
28,439
|
371
|
25,570
|
247
|
17,047
|
|
Trade receivables (current &
non-current)
|
551
|
37,961
|
580
|
39,982
|
698
|
48,095
|
|
Inventories
|
510
|
35,137
|
487
|
33,579
|
457
|
31,498
|
|
Property, plant and equipment
|
785
|
54,083
|
785
|
54,088
|
827
|
57,020
|
|
Goodwill and Other Intangible assets
|
694
|
47,821
|
700
|
48,269
|
715
|
49,289
|
|
Loans and borrowings (current &
non-current)
|
499
|
34,387
|
557
|
38,381
|
787
|
54,273
|
|
Trade payables
|
215
|
14,842
|
211
|
14,553
|
215
|
14,816
|
|
Equity
|
2,121
|
1,46,208
|
2,034
|
1,40,197
|
1,892
|
1,30,430
|
|
Particulars
|
Q1 FY20
|
Q1 FY19
|
YoY
Growth % |
Q4 FY19
|
QoQ
Growth % |
|
(Rs.)
|
(Rs.)
|
(Rs.)
|
|||
|
Global Generics
|
32,982
|
30,636
|
8
|
30,384
|
9
|
|
North America
|
16,322
|
15,903
|
3
|
14,957
|
9
|
|
Europe
|
2,404
|
2,016
|
19
|
1,912
|
26
|
|
India
|
6,960
|
6,074
|
15
|
6,505
|
7
|
|
Emerging Markets
|
7,296
|
6,643
|
10
|
7,010
|
4
|
|
Pharmaceutical Services and Active
Ingredients (PSAI)
|
4,539
|
5,409
|
(16)
|
6,765
|
(33)
|
|
Proprietary Products & Others
|
914
|
1,162
|
(21)
|
3,017
|
(70)
|
|
Total
|
38,435
|
37,207
|
3
|
40,166
|
(4)
|
Segmental
Analysis
Global
Generics (GG)
Revenues
from GG segment at Rs.33.0billion.
Year-on-year growth of 8%, primarilydriven by
Emerging Markets, India and Europe. Sequential growth is 9%.
·
Revenues
from North America at Rs.16.3billion.
Year-on-year growth is 3%. Sequential growth of 9%,is driven by
contribution from new productsand increase in volumes, partly offset by price
erosion coupled with adverse foreign exchange movement. We launched five new
products (Daptomycin, Testosterone gel, Tobramycin, Vitamin K & OTC
calcium carbonate) and re-launched
Isotretinoin during the quarter.
As
of 30th June 2019, cumulatively 107 generic filings are pending for
approval with the USFDA (104 ANDAs and 3 NDAs under 505(b)(2) route). Of these
104 ANDAs, 58 are Para IVs out of which we believe 34 have ‘First to File’
status.
·
Revenues from Emerging
Markets at Rs.7.3billion. Year-on-year growth
is 10%. Sequential growth is 4%.
-
Revenues from Russia at
Rs.4.0billion. Year-on-year growth of
5%. Growth primarily driven by new launches and better realizations in some of
the key molecules.
-
Revenues
from other CIS countries and Romania
market at Rs.1.2billion. Year-on-year growth of 2%.
-
Revenues
from Rest of World (RoW) territories
at Rs.2.1billion.Year-on-year growthof 27%,
primarily driven by new products, traction in new markets and volume traction
in base business.
·
Revenues
from India atRs.7.0billion.
Year-on-year growth of 15%, driven by volume traction and improved realizations
in base business and new product launches. Sequential growth is 7%.
·
Revenues from Europe at Rs.2.4billion. Year-on-year growth of 19%, primarily
on account of new products and volume traction on account of improvement in
supplies. Sequential growth is 26%.
Pharmaceutical Services and Active Ingredients
(PSAI)
·
Revenues
from PSAI at Rs.4.5billion.Year-on-year
decline of 16% and sequential decline is 33% due to decline in the sales volume
of certain products.
Proprietary
Products (PP)
·
Revenues
from PP at Rs.281million.
Year-on-year decline of 61% due to absence of the derma products sales (which
were divested in the previous year).
Income
Statement Highlights:
·
Gross
profit margin at 51.7%.
-
declined
by ~70 bps sequentially and ~400 bps over that of previous year
-
sequentially
– excluding the impact of one-time out licensing income of Rs.1.8 billion
realized from the sale of derma brands, the gross margins have witnessed
improvement of 150 bps on a sequential basis
-
YoY
impacted by price erosiondue to increased competitive intensity in some of our
key molecules in the USand Europe, and lower sales from PSAI business
-
Gross
profit margin for GG and PSAI business segments are at 57.6% and 7.2%
respectively.
·
SG&A
expenses at Rs.12.1billion, remained flat on a year-on-year
basis and declined by 3% sequentially.
·
R&D
expenses at Rs.3.6billion. As % to Revenues- Q1 FY20: 9.4% |
Q4 FY 19: 9.1% | Q1 FY19: 11.2%. Focus continues on building complex generics,
bio-similars and differentiated products pipeline.
·
Other
operating income at Rs.3.8 billion; includes Rs.3.5
billion received from Celgene pursuant to an agreement entered towardssettlement
of any claim the Company or its affiliates may have had for damages under
section 8 of the Canadian Patented Medicines (Notice of Compliance) Regulations
in regard to the Company’s ANDS for a generic version of REVLIMID brand
capsules, (Lenalidomide) pending before Health Canada.
·
Net
Finance income at Rs.393million compared to Rs.156
million in Q1FY19. The increaseis primarily on account of higher profit on
sales of investmentsby Rs.202 million during the quarter.
·
Profit
after Tax at Rs.6.6billion. The effective tax rate is around
22% for the quarter.
·
Diluted
earnings per share is at Rs.39.91
Organizational
Update:
With effectfrom August 1, 2019, Erez Israeli
will be elevated as Chief Executive Officer (CEO) of Dr. Reddy’s Laboratories Limited.
GV Prasad will continue as the Co-Chairman and Managing Director and Erez Israeli
will continue to report to him.
Since joining Dr. Reddy’s as Chief Operating
Officer (COO) in April 2018, Erez has spear-headed the transformation agenda of
the organization by ensuring clear focus and strategy, setting foundations for
a sustainable financial growth and leading business delivery.His appointment
will help to propel the organization’s growth agenda forward.
Earnings Call Details (06:30 pm IST, 09:00 am EDT, July 29, 2019)
The Company will host an earnings call to discuss the performance
and answer any questions from participants.
Audio
conference Participants can dial-in on the numbers below:
Universal
Access Number: +91 22 6280 1219
Secondary
number: +91 22 7115 8120
Local Access number:
+91 70456 71221
(Available all over India)
International
Toll Free Number USA 18667462133
UK 08081011573
Singapore
8001012045
Hong
Kong 800964448
Playback
of call: +91 22 7194 5757, +91 22 6663 5757
Conference
ID: 20718
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. (BSE: 500124, NSE: DRREDDY, NYSE: 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 gastrointestinal, cardiovascular,
diabetology, oncology, pain management and dermatology. Dr. Reddy’s operates in
markets across the globe. Our major markets include – USA, India, Russia &
CIS countries, and Europe. 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, (v) the impact of
acquisitions or reorganisation , including related integration issues.
The
company assumes no obligation to update any information contained herein.
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