HYDERABAD, India
Dr. Reddy’s Laboratories Ltd. (NYSE: RDY | BSE: 500124 | NSE: DRREDDY) 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
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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 | ) | ||||||||||||||||||||||
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EBITDA Computation |
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| Particulars | FY 16 | FY 15 | ||||||||||||||
| ($) |
(Rs.) |
($) |
(Rs.) |
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| 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.
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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.) |
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| 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 | ||||||||||
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Revenue Mix by Segment |
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| Particulars | FY 16 | FY 15 | Growth % | ||||||||||||||||||||
| ($) |
(Rs.) |
% | ($) |
(Rs.) </ | |||||||||||||||||||