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, 2020 under
International Financial Reporting Standards (IFRS).
Q4 Performance Summary
FY20 Performance Summary
Rs. 4,432 Cr
Rs. 17,460 Cr
Revenue
Revenue
[Up: 1% QoQ; Up: 10% YoY]
[Up: 13% YoY]
51.5%
53.8%
Gross Margin
Gross Margin
[Q3 FY20: 54.1%; Q4 FY19: 52.4%]
[FY19: 54.2%]
Rs. 1,218 Cr
Rs. 5,013 Cr
SGNA expenses
SGNA expenses
[Down: 4% QoQ, Down: 1% YoY]
[Up: 3% YoY]
Rs. 419 Cr
Rs. 1,541 Cr
R&D expenses
R&D expenses
[9.5% of Revenues]
[8.8% of Revenues]
Rs. 1,001 Cr
Rs. 4,643 Cr
EBITDA
EBITDA
[Down: 7% QoQ; Up: 14% YoY]
[Up: 36% YoY]
Rs. 714 Cr
Rs. 1,803 Cr *
Profit before Tax
Profit before Tax
[16.1% of Revenues]
[10.3% of Revenues]
* Excluding intangibles impairment of Rs.
1,677 Cr; Adjusted Profit before tax is Rs. 3,480 Cr (55% growth
YoY)
Commenting on the results, Co-Chairman and MD, GV Prasad said,
“FY 20 has been a very positive year for the company. Progress made
during the year includes VAI status for CTO 6, healthy product
pipeline build up, productivity improvement, and strong financial
performance across our businesses.”
All amounts in millions, except EPS. All US
dollar amounts based on convenience translation rate of I USD = Rs.
75.39
Dr. Reddy’s Laboratories
Limited and Subsidiaries
Consolidated Income
Statement
Particulars
Q4 FY20
Q4 FY19
YoY Gr %
Q3 FY20
QoQ Gr%
($)
(Rs.)
($)
(Rs.)
($)
(Rs.)
Revenues
588
44,318
533
40,166
10
581
43,838
1
Cost of Revenues
285
21,510
254
19,113
13
267
20,116
7
Gross Profit
303
22,808
279
21,053
8
315
23,722
(4)
Operating Expenses
Selling, General & Administrative
expenses
162
12,177
163
12,294
(1)
168
12,670
(4)
Research and Development expenses
56
4,190
49
3,662
14
52
3,949
6
Impairment of non-current assets
0
7
1
82
(91)
175
13,200
(100)
Other operating income
(2)
(168)
(4)
(330)
(49)
(3)
(228)
(26)
Results from operating
activities
88
6,602
71
5,345
24
(78)
(5,869)
(212)
Net finance income
(6)
(435)
(5)
(349)
25
(6)
(419)
4
Share of profit of equity accounted
investees
(1)
(105)
(2)
(157)
(33)
(2)
(176)
(40)
Profit before income tax
95
7,142
78
5,851
22
(70)
(5,274)
(235)
Income tax
(7)
(500)
20
1,507
(133)
6
423
(218)
Profit for the period
101
7,642
58
4,344
76
(76)
(5,697)
(234)
Diluted Earnings Per Share
(EPS)
0.61
46.01
0.35
26.16
76
(0.46)
(34.37)
(234)
As % to Revenues
Q4 FY20
Q4 FY19
Q3 FY20
Gross Profit
51.5
52.4
54.1
SG&A
27.5
30.6
28.9
R&D
9.5
9.1
9.0
EBITDA
22.6
22.0
24.5
PBT
16.1
14.6
(12.0)
PAT
17.2
10.8
(13.0)
EBITDA Computation
Particulars
Q4 FY20
Q4 FY19
Q3 FY20
($)
(Rs.)
($)
(Rs.)
($)
(Rs.)
Profit before Income Tax
95
7,142
78
5,851
(70)
(5,274)
Interest (income) net*
(1)
(100)
(3)
(215)
(4)
(274)
Depreciation
28
2,080
28
2,136
28
2,130
Amortization
12
885
13
965
13
955
Impairment
0
7
1
82
175
13,200
EBITDA
133
10,013
117
8,819
142
10,737
* Includes income from Investments
Revenue Mix by Segment
Particulars
Q4 FY20
Q4 FY19
YoY Growth %
Q3 FY20
QoQ Growth %
(Rs.)
(Rs.)
(Rs.)
Global Generics
36,398
30,384
20
35,927
1
North America
18,072
14,957
21
15,999
13
Europe
3,446
1,912
80
3,093
11
India
6,839
6,505
5
7,636
(10)
Emerging Markets
8,042
7,010
15
9,199
(13)
Pharmaceutical Services and Active
Ingredients (PSAI)
7,195
6,765
6
6,906
4
Proprietary Products &
Others
725
3,017
(76)
1,005
(28)
Total
44,318
40,166
10
43,838
1
Dr. Reddy’s Laboratories
Limited and Subsidiaries
Consolidated Income
Statement
Particulars
FY 20
FY 19
Growth %
($)
(Rs.)
%
($)
(Rs.)
%
Revenues
2,316
1,74,600
100.0
2,041
1,53,851
100.0
13
Cost of Revenues
1,069
80,591
46.2
934
70,421
45.8
14
Gross Profit
1,247
94,009
53.8
1,107
83,430
54.2
13
Operating Expenses
Selling, General & Administrative
expenses
665
50,129
28.7
646
48,680
31.6
3
Research and Development expenses
204
15,410
8.8
207
15,607
10.1
(1)
Impairment of non-current assets
222
16,767
9.6
3
210
0.1
7884
Other operating income
(57)
(4,290)
(2.5)
(26)
(1,955)
(1.3)
119
Results from operating
activities
212
15,993
9.2
277
20,888
13.6
(23)
Net finance income
(20)
(1,478)
(0.8)
(15)
(1,117)
(0.7)
32
Share of profit of equity accounted
investees
(7)
(561)
(0.3)
(6)
(438)
(0.3)
28
Profit before income tax
239
18,032
10.3
298
22,443
14.6
(20)
Income tax
(19)
(1,466)
(0.8)
48
3,648
2.4
(140)
Profit for the period
259
19,498
11.2
249
18,795
12.2
4
Diluted Earnings Per Share
(EPS)
1.56
117.40
1.50
113.09
4
EBITDA Computation
Particulars
FY 20
FY 19
($)
(Rs.)
($)
(Rs.)
Profit before Income Tax
239
18,032
298
22,443
Interest (income) net*
(11)
(839)
(9)
(654)
Depreciation
115
8,640
111
8,362
Amortization
51
3,832
51
3,828
Impairment
222
16,767
3
210
EBITDA
616
46,431
453
34,189
EBITDA (% to revenues)
26.6
22.2
* Includes income from Investments
Key Balance Sheet
Items
Particulars
As on 31st Mar, 2020
As on 31st Dec 2019
As on 31st Mar 2019
($)
(Rs.)
($)
(Rs.)
($)
(Rs.)
Cash and cash equivalents and other
investments
346
26,068
271
20,457
339
25,570
Trade receivables (current &
non-current)
690
52,015
611
46,095
530
39,982
Inventories
465
35,066
501
37,746
445
33,579
Property, plant and equipment
694
52,332
699
52,709
717
54,088
Goodwill and Other Intangible assets
420
31,653
409
30,847
640
48,269
Loans and borrowings (current &
non-current)
293
22,102
216
16,320
509
38,381
Trade payables
221
16,659
236
17,810
193
14,553
Equity
2,056
1,54,988
1,972
1,48,672
1,860
1,40,197
Revenue Mix by Segment [Year
on year]
Particulars
FY 20
FY 19
Growth %
($)
(Rs.)
%
($)
(Rs.)
%
Global Generics
1,832
1,38,123
79.1
1,630
1,22,903
79.9
12
North America
64,659
59,957
8
Europe
11,707
7,873
49
India
28,946
26,179
11
Emerging Markets
32,811
28,894
14
Pharmaceutical Services and Active
Ingredients (PSAI)
342
25,747
14.7
320
24,140
15.7
7
Proprietary Products &
Others
142
10,730
6.1
90
6,808
4.4
58
Total
2,316
1,74,600
100.0
2,041
1,53,851
100.0
13
Response to COVID-19
We are taking all the protective measures in terms of ensuring
the health and safety of our employees by following the physical
distance norms, using protective gear, and other appropriate
measures. Various initiatives have been undertaken to ensure that
our manufacturing related operations continue unabated, enabling us
to serve our patients. A few products related to COVID-19 are under
development. We are using digital channels for enabling work from
home and reaching out to doctors, customers and vendors. We are
also playing our part of contributing to the society by extending
support through various CSR initiatives such as supporting the
health care professionals and others with the PPE kits, masks,
sanitizers, gloves besides providing food assistance to the
marginal sections & migrant families.
Revenue Analysis [Q4 and full year FY 20]
Global Generics (GG)
- Revenues from GG segment at Rs. 138.1 billion higher by 12%
over FY 19, on account of growth across all our markets. There has
been double digit growth in branded markets (India, Emerging
markets) and turnaround in our generics business (NAG,
Europe).
- Q4 revenue at Rs. 36.4 billion, YoY growth of 20% and QoQ
growth of 1%. The QoQ was driven by NAG & Europe partly offset
by decline in India & Emerging Markets.
North America Generics (NAG)
- Revenues from North America Generics for the year at Rs. 64.7
billion, YoY growth of 8%. The year was benefited by new launches,
scale up of existing products and a favorable forex rate, which was
partially offset by price erosion.
- Revenues for Q4 at Rs. 18.1 billion, YoY growth of 21% and QoQ
growth of 13%, supported by contribution from new product launches
and increase in volumes for existing products. The volumes were
higher partially due to COVID-19 related stocking up. During this
quarter, we launched 5 new products – major ones being Naproxen and
Esomeprazole Magnesium delayed-release tablets (gVimovo),
Pyrimethamine Tablets (gDaraprim) and Naloxone HCL Injection (with
CGT exclusivity).
- As of 31st March 2020, cumulatively 99 generic filings are
pending for approval with the USFDA (97 ANDAs and 2 NDAs under
505(b)(2) route). Out of the pending ANDAs, 54 are Para IVs, and we
believe 30 have ‘First to File’ status.
India
- Revenues from India for the year at Rs. 28.9 billion.
Year-on-year growth of 11%, driven by improved realizations in base
business, volume traction and new products launched during the
year.
- Revenues for Q4 at Rs. 6.8 billion, YoY growth of 5%, QoQ
decline of 10%. The Q4 revenues were partially impacted due to
logistics related disruptions caused by COVID-19 lock-downs.
Emerging Markets (EM)
- Revenues from Emerging Markets for the year at Rs. 32.8
billion, growth of 14%. - Revenues from Russia for the year at Rs.
16.9 billion, YoY growth of 10%. Growth was majorly driven by
increase in volumes and improvement in realizations for some of our
key molecules. - Revenues from other CIS countries and Romania for
the year at Rs. 6.5 billion, YoY growth of 23%. Growth was on
account of increase in volumes and new launches. - Revenues from
Rest of World (RoW) territories for the year at Rs. 9.4 billion,
YoY growth of 13%. Growth primarily on account of new launches and
volume traction in key products, partially impacted by price
erosion in certain markets.
- Revenues for the quarter are Rs. 8.0 billion, YoY growth of
15%, QoQ decline of 13%. - Revenues for Russia for the Q4 at Rs.
3.9 billion, YoY growth of 8%, QoQ decline of 20%. - Revenues from
other CIS countries and Romania for the quarter are Rs. 1.8
billion, YoY growth of 51%, QoQ decline of 2%. - Revenues from Rest
of World (RoW) territories for this quarter are Rs. 2.3 billion,
YoY growth of 6%, QoQ decline of 5%.
Europe
- Revenues from Europe for the year at Rs. 11.7 billion. YoY
growth of 49%, primarily on account of volume traction in base
business and new product launches across our markets, including
newer markets of France, Italy and Spain, which was partially
offset by price erosion.
- Revenues for Q4 at Rs. 3.4 billion, YoY growth of 80% and QoQ
growth of 11%.
Pharmaceutical Services and Active Ingredients (PSAI)
- Revenues from PSAI at Rs. 25.7 billion. Year-on-year growth of
7% largely driven by increase in volumes of key products of API
business and favorable forex.
- Revenues for Q4 at Rs. 7.2 billion, YoY growth of 6% and QoQ
growth of 4%.
- During the year, we have filed 10 DMFs in the US.
Proprietary Products (PP)
- Revenues from PP for the year at Rs. 7.9 billion, YoY growth of
67%. During the year, we sold our US and select territory rights
for ZEMBRACE® SYMTOUCH® (sumatriptan injection) 3 mg and TOSYMRA TM
(sumatriptan nasal spray) 10 mg, of our Neurology franchise.
- Revenues for Q4 are Rs. 2 million.
Income Statement Highlights:
- Gross profit margin for the year at 53.8%, declined by ~40 bps
over previous year primarily on account of price erosions in the
US, Europe and certain emerging markets and region mix. The decline
was partially offset due to revenue recognized on the sale of
rights for two PP Neuro products. Gross profit margin for GG and
PSAI business segments are at 56.8% and 24.1% respectively.
- Gross profit margin for the Q4 at 51.5% (GG: 55.9%, PSAI:
28.4%). - YoY basis the gross margin declined by ~90 bps, as in Q4
FY 19 we recognized revenue from sale of rights for three products
of our PP Derma business. - QoQ basis the gross margin declined by
~260 bps, primarily on account of (a) change in the business mix,
(b) increase in inventory provisions / write-offs, and (c) impact
of price erosion.
- SG&A expenses for FY 20 at Rs. 50.1 billion, an increase of
3% on a YoY basis. SG&A expenses for Q4 at Rs. 12.2 billion,
YoY decline of 1% and QoQ decline of 4%. SG&A as a % to sales
for the full year improved by 290 bps as compared to FY19. Our
focus on cost optimization and productivity improvement continue to
yield positive results.
- Impairment charge at Rs. 16.8 billion in FY 20, which were
taken considering the triggers which occurred during the year.
- Research & development (R&D) expenses at Rs. 15.4
billion. As % to Revenues – FY20: 8.8% | FY 19: 10.1%. Focus
continues on building complex generics, bio-similars and
differentiated products pipeline. R&D expenses for Q4 at Rs.
4.2 billion, as % to revenues stood at 9.5%.
- Other operating income for the year at Rs. 4.3 billion compared
to Rs. 2.0 billion in FY19. The increase is primarily on account of
Rs. 3.5 billion received from Celgene pursuant to a settlement
agreement in Canada.
- Net Finance income for the year at Rs. 1.5 billion compared to
Rs. 1.1 billion in FY19. The increase is primarily on account of
higher foreign exchange gain in current year as compared to FY19.
Net finance income in Q4 is Rs. 0.4 billion.
- Profit before Tax for the year at Rs. 18.0 billion, impacted by
Rs. 16.8 billion of impairment charge. Adjusted for it, the profit
before tax is at Rs. 34.8 billion. Profit before Tax for Q4 is at
Rs. 7.1 billion.
- Profit after Tax for the year at Rs. 19.5 billion and for Q4 at
Rs. 7.6 billion, which are higher than profit before tax, majorly
due to recognition of MAT credit and creation of deferred tax
assets, in line with the requirements of accounting standards.
- Diluted earnings per share for the year is at Rs.117.4. Diluted
earnings per share for Q4 is at Rs. 46.0
- Capital expenditure for FY20 is at Rs. 4.8 billion. Capital
expenditure for Q4 FY20 is at Rs. 1.5 billion.
- The Board has recommended payment of a dividend of Rs. 25 per
equity share of face value Rs 5/- each (500% of face value) for the
year ended March 31, 2020 subject to approval of members.
Earnings Call Details (05:15 pm IST, 07:45 am EDT, May 20,
2020)
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
1 866 746 2133
UK
0 808 101 1573
Singapore
800 101 2045
Hong Kong
800 964 448
Playback of call:
+91 22 7194 5757, +91 22 6663
5757
Conference ID:
74886
Transcript of the event will be available at www.drreddys.com.
The play back will be available after the earnings call, till May
27th, 2020.
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, (vi) the susceptibility of our industry and the markets
addressed by our, and our customers’, products and services to
economic downturns as a result of natural disasters, epidemics,
pandemics or other widespread illness, including coronavirus (or
COVID-19), and (vii) other risks and uncertainties identified in
our public filings with the Securities and Exchange Commission,
including those listed under the "Risk Factors" and
"Forward-Looking Statements" sections of our Annual Report on Form
20-F for the year ended March 31, 2019. The company assumes no
obligation to update any information contained herein.
The company assumes no obligation to update any information
contained herein.
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INVESTOR RELATIONS AMIT AGARWAL amita@drreddys.com (Ph:
+91-40-4900 2135)
MEDIA RELATIONS APARNA TEKURI aparnatekuri@drreddys.com
(PH: +91-40-4900 2446)
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