Hyderabad, July 29, 2019: Dr. Reddy’s Laboratories Ltd. (BSE: 500124 | NSE: DRREDDY | NYSE: RDY) today announced its consolidated financial results for the quarter ended June 30, 2019 under International Financial Reporting Standards (IFRS).
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 |
Revenue Mix by Segment
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.33.0 billion. Year-on-year growth of 8%, primarily driven by Emerging Markets, India and Europe. Sequential growth is 9%.
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 Russia at Rs.4.0 billion. 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.1.2 billion. Year-on-year growth of 2%.
– Revenues from Rest of World (RoW) territories at Rs.2.1 billion. Year-on-year growth of 27%, primarily driven by new products, traction in new markets and volume traction in base business.
Pharmaceutical Services and Active Ingredients (PSAI)
Proprietary Products (PP)
Income Statement Highlights:
– 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 erosion due to increased competitive intensity in some of our key molecules in the US and Europe, and lower sales from PSAI business
– Gross profit margin for GG and PSAI business segments are at 57.6% and 7.2% respectively.
Organizational Update:
With effect from 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 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: 20718
Transcript of the event will be available at www.drreddys.com. Playback will be available for a few days.
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