- Q4 Revenues at Rs. 35.5 Bn
- Q4 EBITDA at Rs. 6.3 Bn
- FY 17 Revenues at Rs. 140.8 Bn
- FY 17 EBITDA at Rs. 25.5 Bn
Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY |
NYSE: RDY) today announced its consolidated financial results for
the fourth quarter and full year ended March 31, 2017 under
International Financial Reporting Standards (IFRS).
FY17: Key Highlights
- Revenues at Rs. 140.8 billion: YoY
decline: 9%
- Gross Profit Margin at 55.6%
- Research & Development (R&D)
spend at Rs. 19.6 billion [13.9% of Revenues]
- Selling, general & administrative
(SG&A) expenses at Rs. 46.4 billion [YoY increase: 1%]
- EBITDA at Rs. 25.5 billion [18.1% of
Revenues]
- Profit after tax at Rs. 12.0 billion
[8.5% of Revenues]
Q4 FY17: Key Highlights
- Revenues at Rs. 35.5 billion: QoQ
decline: 4%; YoY decline: 5%
- Gross Profit Margin at 51.2%
- R&D spend at Rs. 4.6 billion [12.9%
of Revenues]
- SG&A expenses at Rs. 11.0 billion
[YoY decline: 6%]
- EBITDA at Rs. 6.3 billion [17.7% of
Revenues]
- Profit after tax at Rs. 3.1 billion
[8.8% of Revenues]
Commenting on the results, Co-chairman and CEO, G V Prasad said,
“FY17 has been a challenging year due to lack of new product
approvals for the US market. However, our other geographies
delivered good performances, with several new product launches. We
are also seeing expanded global access to our Biosimilars, as a
result of successful registrations in Emerging Markets. We will
continue our focus on rationalisation of cost structures and
building a sustainable quality culture across the
organisation.”
All amounts in millions, except EPSAll US
dollar amounts based on convenience translation rate of I USD = Rs.
64.85
Dr. Reddy’s Laboratories Limited and
Subsidiaries
Consolidated Income Statement for Q4 FY
17
Q4 FY17 Q4
FY16 Particulars
($) (Rs.) %
($)
(Rs.) %
Growth % Revenues
548 35,542 100.0
579 37,562 100.0
(5 ) Cost of revenues 268
17,360 48.8 251
16,286 43.4 7
Gross
profit 280
18,182 51.2 328
21,276 56.6
(15 ) Operating Expenses Selling, general
& administrative expenses 169 10,973 30.9 179 11,632 31.0 (6 )
Research and development expenses 71 4,579 12.9 75 4,879 13.0 (6 )
Other operating (income) / expense (8 )
(505 ) (1.4 ) (5 ) (307 ) (0.8 )
64
Results from operating activities
48 3,135
8.8 78 5,072
13.5 (38 ) Net
finance expense 1 48 0.1 41 2,646 7.0 (98 ) Share of (profit) /
loss of equity accounted investees (2 )
(102 ) (0.3 ) (1 ) (59 ) (0.2 )
72
Profit before income tax
49 3,189 9.0
38 2,485
6.6 28 Income tax expense
1 64 0.2 27
1,739 4.6 (96 )
Profit
for the period 48
3,125 8.8 11
746 2.0
319 -
-
Diluted EPS 0.29
18.83 0.07
4.36 332
EBITDA Computation
Particulars Q4 FY 17
Q4 FY 16 $
Rs. $ Rs. Profit before
income tax 49 3,189 38
2,485 Interest income, net* (1 ) (90 ) (11 ) (713 )
Depreciation# 36 2,338 32 2,062 Amortization
13 866 15 970
EBITDA 97
6,303 74 4,804
EBITDA% to Revenues
17.7 % 12.8
%
* Includes income from Investments; #
Includes Impairment charge
Key Balance Sheet Items
Particulars As on
31st Mar 17 As on
31st Dec 16 ($)
(Rs.) ($)
(Rs.) Cash and cash equivalents and Other current
Investments 280 18,136
311 20,145 Trade Receivables
587 38,065 634
41,119 Inventories 440
28,529 463 30,052
Property, plant and equipment 881
57,160 882 57,209
Goodwill and Other Intangible assets 751
48,677 771 49,977
Loans and borrowings (current & non-current)
758 49,185 894
57,999 Trade & other payables 207
13,417 205 13,308
Equity 1,913 1,24,044
1,866 121,040
Dr. Reddy’s Laboratories Limited and
Subsidiaries
Consolidated Income Statement for FY
17
FY17 FY16
Particulars ($)
(Rs.) %
($)
(Rs.) %
Growth % Revenues
2,171 1,40,809
100.0 2,386 1,54,708
100.0 (9 ) Cost of revenues
963 62,453 44.4
963 62,427 40.4 0
Gross profit 1,208
78,356 55.6
1,423 92,281 59.6
(15 ) Operating Expenses
Selling, general & administrative expenses 715 46,372 32.9 705
45,702 29.5 1 Research and development expenses 301 19,551 13.9 275
17,834 11.5 10 Other operating (income) / expense
(16 ) (1,065 ) (0.8 ) (13 ) (874
) (0.6 ) 22
Results from operating
activities 208
13,498 9.6 457
29,619 19.1
(54 ) Net finance (income) / expense (12 ) (806 )
(0.6 ) 42 2,708 1.8 (130 ) Share of (profit) / loss of equity
accounted investees (5 ) (349 )
(0.2 ) (4 ) (229 ) (0.1 ) 52
Profit / (loss) before income tax
226 14,653 10.4
418 27,140
17.5 (46 ) Income tax (benefit)
/ expense 40 2,614
1.9 110 7,127 4.6
(63 )
Profit / (loss) for the period
186 12,039
8.5 309 20,013
12.9 (40 )
-
Diluted
EPS 1.11 72.09
1.80 116.98
(38 )
EBITDA Computation
Particulars FY 17
FY 16 $ Rs.
$ Rs. Profit before income tax
226 14,653 418
27,140 Interest income, net* (14 ) (880 ) (22 ) (1,425 )
Depreciation# 122 7,931 106 6,874 Amortization#
59 3,791 56 3,663
EBITDA 393
25,495 559 36,252
EBITDA% to Revenues
18.1 % 23.4
%
* Includes income from Investments; #
Includes Impairment charge
Key Balance Sheet Items
Particulars As on
31st Mar 17 As on
31st Mar 16 ($)
(Rs.) ($)
(Rs.) Cash and cash equivalents and Other current
Investments 280 18,136
616 39,955 Trade Receivables
587 38,065 637
41,306 Inventories 440
28,529 394 25,578
Property, plant and equipment 881
57,160 832 53,961
Goodwill and Other Intangible assets 751
48,677 380 24,644
Loans and borrowings (current & non-current)
758 49,185 517
33,513 Trade & other payables 207
13,417 190 12,300
Equity 1,913 1,24,044
1,979 1,28,336
Revenue Mix by Segment [FY 17 vs FY
16]
Particulars FY 17
FY 16 Growth % ($)
(Rs.) % ($)
(Rs.) % Global Generics
1,780 1,15,409
82 1,975 1,28,062
83 (10 ) North America
63,601
75,445 (16 ) Europe*
7,606 7,732
(2 ) India 23,131
21,293 9
Emerging Markets# 21,071
23,592 (11
)
PSAI 328
21,277 15 345
22,379 14 (5 ) North
America 3,569
3,052 17 Europe
8,410
9,313 (10 ) India
1,750 2,618
(33 ) Rest of World
7,548 7,396
2
Proprietary Products & Others
64 4,123
3 66 4,267
3 (3 ) Total
2,171 1,40,809 100
2,386 1,54,708 100
(9 )
Revenue Mix by Segment [Q4 FY 17 vs Q3
FY 17]
Particulars Q4 FY 17
Q3 FY 17 Growth %
($) (Rs.) %
($)
(Rs.) %
Global Generics
449 29,138 82
472 30,638 83
(5 ) North America
15,349 16,595
(8 ) Europe* 2,066
2,148 (4 )
India 5,711
5,947 (4 ) Emerging Markets#
6,012
5,948 1
PSAI
83 5,401
15 83 5,400
14 - North America
532 1,259
(58 ) Europe 2,539
1,828 39
India 395
409 (3 ) Rest of World
1,935
1,904 2
Proprietary
Products & Others 15
1,003 3 16
1,027 3 (2 ) Total
548 35,542
100 572 37,065
100 (4 )
Revenue Mix by Segment [Q4 FY 17 vs Q4
FY 16]
Particulars Q4 FY17
Q4 FY16 Growth %
($) (Rs.) % ($)
(Rs.) % Global Generics
449 29,138
82 475 30,774
82 (5 ) North America
15,349
18,950 (19 ) Europe*
2,066 1,759
17 India
5,711 5,267
8 Emerging Markets# 6,012
4,798 25
PSAI 83
5,401 15 89
5,766 15 (6 ) North
America 532
742 (28 ) Europe
2,539 2,586
(2 ) India
395 603 (35
) Rest of World 1,935
1,835 5
Proprietary Products &
Others
15 1,003
3 16 1,022
3 (2 ) Total
548 35,542 100
579 37,562 100
(5 )
* 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
Segmental Analysis
Global Generics (GG)
Revenues from GG segment for FY 17 at Rs. 115.4 billion,
year-on-year decline of 10%; primarily on account of lower
contribution from North America and Emerging Markets. Revenues for
fourth quarter declined by 5% on a year-on-year basis.
- Revenues from North America for
FY 17 at Rs. 63.6 billion, year-on-year decline of 16%. This is
primarily on account of increased competition in our key products
namely valganciclovir, decitabine, azacitidine etc. coupled with
discontinuation of the McNeil business. Revenues for fourth quarter
at Rs. 15.3 billion.During the year, we filed 26 ANDAs with USFDA.
Of these 13 ANDAs filed in the fourth quarter.As of 31st March,
2017, cumulatively 101 generic filings are pending for approval
with the USFDA (99 ANDAs and 2 NDAs under 505(b)(2) route). Of
these 99 ANDAs, 62 are Para IVs out of which we believe 21 have
‘First to File’ status.
- Revenues from Emerging Markets
for FY 17 at Rs. 21.1 billion, year-on-year decline of 11%,
primarily on account of constrained operations in Venezuela.
Revenues for fourth quarter at Rs. 6 billion. Gradual sequential
improvement through the year is backed by improving macro economic
environment across geographies coupled with focused foray into the
institutional business in some countries.
- Revenues from Russia for FY 17
at Rs. 11.5 billion, year-on-year growth of 9%. In constant
currency it has grown by 8%. Revenues the fourth quarter at Rs. 3.4
billion and grew 26% year-on-year in constant currency.
- Revenues from other CIS countries
and Romania for FY 17 at Rs. 3.7 billion, year-on-year growth
of 4%.
- Revenues from Rest of World
(RoW) territories for FY 17 at Rs. 5.8 billion, year-on-year
decline of 38%. This is primarily on account of constrained
operations in Venezuela.
- Revenues from India at Rs. 23.1
billion, year-on-year growth of 9%. Revenues for fourth quarter at
Rs. 5.7 billion and grew 8% year-on-year.
- Revenues from Europe at Rs. 7.6
billion, year-on-year decline of 2%, impacted due to weak GBP.
Pharmaceutical Services and Active Ingredients (PSAI)
- Revenues from PSAI at Rs. 21.3
billion, year-on-year decline of 5%. Revenues for fourth quarter at
Rs. 5.4 billion declined by 6%.
- During the year, 82 DMFs were filed
globally of which 9 were in the US. Cumulative number of DMF
filings as of 31st March, 2017 was 754.
Proprietary Products (PP)
Zembrace™Sym Touch ™(Suma 3 mg) injection and Sernivo™
(betamethasone dipropionate) Spray, 0.05% are gradually gaining
traction, with an improvement in the sales volumes.
Income Statement Highlights:
- Gross profit margin for FY 17 is at
55.6% and declined ~400 bps over that of previous year. This
decline is primarily on account of high price erosion in our North
America Generics Business, impairment charge taken at our Bristol
plant, provision towards new product inventory and higher
manufacturing overheads. Gross profit margin for GG and PSAI
business segments are at 61.6% and 21.0% respectively. Gross profit
margin for the fourth quarter at 51.2%.
- SG&A expenses for FY 17 at Rs. 46.4
billion. Marginal increase of 1%. SG&A expenses for fourth
quarter at Rs. 11 billion.
- R&D expenses for FY 17 at Rs. 19.6
billion, 13.9% of Revenues, against 11.5% in FY 16. R&D expense
for the fourth quarter at Rs. 4.6 billion, 12.9% of Revenues. Focus
continues to build a sustainable revenue stream through a mix of
simple and complex generics, biosimilars and differentiated
products pipeline.
- Net finance income for FY 17 is Rs. 806
million compared to net finance expense of Rs. 2,708 million in FY
16. This is on account of:
- Net foreign exchange loss of Rs. 74
million in the current year vs net foreign exchange loss of Rs.
4,133 million in the previous year primarily related to the
Venezuela adjustment.
- Increase in profit on sales of
investments by Rs. 105 million; offset by
- Net decrease in interest income of Rs.
650 million.
- Profit after Tax for FY 17 at Rs. 12.0
billion. PAT for fourth quarter at Rs. 3.1 billion.
- Diluted earnings per share for FY 17 is
at Rs. 72.1 and Rs. 18.8 for fourth quarter.
- Capital expenditure for FY 17 is at Rs.
11.7 billion and Rs. 2.4 billion for fourth quarter.
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, 2017 subject to approval of members
Earnings Call Details (06:00 pm IST, 08:30 am EDT, May 12,
2017)
The Company will host an earnings call 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
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. (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 gastro-intestinal, cardiovascular, diabetology,
oncology, pain management and dermatology. Dr. Reddy’s operates in
markets across the globe. Our major markets include – USA, India,
Russia and other CIS countries. 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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