Dr Reddy's Laboratories reports Rs 570 cr loss for Q3 on impairment of generic Nuvaring drug; revenue up 14%
Dr Reddy's Laboratories Limited's suffered nearly Rs 570 crore loss for the quarter ended 31 December against Rs 485 crore profit after tax during the corresponding period of FY19, the company said on Monday
Commenting on the results, Co-Chairman and MD, GV Prasad said, the current quarter performance has been good across all our businesses and we achieved strong EBITDA margins
Revenues for Q3 was up by 14 percent to Rs 4,384 crore against Rs 3,850 crore in Q3 of last fiscal
Dr Reddy's spent Rs 390 crore towards Research and Development expenses during the October-December quarter
Hyderabad: Dr Reddy's Laboratories Limited's suffered nearly Rs 570 crore loss for the quarter ended 31 December against Rs 485 crore profit after tax during the corresponding period of FY19, the company said on Monday.
Revenues for the quarter under discussion was up by 14 percent to Rs 4,384 crore against Rs 3,850 crore in Q3 of last fiscal, a press release said.
Commenting on the results, Co-Chairman and MD, GV Prasad said, "The current quarter performance has been good across all our businesses and we achieved strong EBITDA margins.
#3QWithCNBCTV18 | Dr Reddy's reports net loss of Rs 569.7 cr against CNBC-TV18 poll of Rs 493.1 cr profit. Co reports loss because of impairment of non-current assets of Rs 1,320 cr pic.twitter.com/Pz0CivxrcF
— CNBC-TV18 (@CNBCTV18Live) January 27, 2020
"The profits were impacted due to trigger based impairment charge taken on a few products including Nuvaring. We continue to focus on execution and have made significant progress on quality systems and operational efficiencies."
Q3 FY20 Financials include an impairment charge of Rs 1,320 crore on some of the Company's products forming part of Global Generics and Proprietary Products segments, the drug maker said.
In December, 2019 there had been a generic launch and an authorised generic launch for the product Nuvaring, which has led to a considerable erosion in the value of this product for the company, and accordingly, the drugmaker has taken an impairment charge of Rs 110 crore ($156.5 million).
"In addition to this, considering the current market dynamics, we have taken an impairment charge of Rs 2.1 billion (Rs 210 crore) on the intangibles pertaining to other products. In total, we have taken an impairment of Rs 13.2 billion (Rs 1,320 crore) on the intangible assets for this quarter," it said.
Revenues from Global Generics segment was reported at Rs 3,590 crore, year-on-year growth of 15 percent, primarily driven by Europe, emerging markets and India.
Revenues from North America was at Rs 1,600 crore, a year-on-year growth of eight percent the company launched five new products (Bortezomib injection, Doxercalciferol, Deferasirox dispersable tabs, Deferasirox film-coated tabs, Sodium Nitroprusside injection) during the quarter in the US market.
Revenues from Emerging Markets was Rs 920 crore and India at Rs 720 crore.
Revenues from Pharmaceutical Services and Active Ingredients was reported at Rs 690 crore a growth 16 percent over the same quarter last year.
Dr Reddy's spent Rs 390 crore towards Research and Development expenses during the October-December quarter.
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Dr Reddy's Laboratories India's No. 2 drugmaker by sales, said the US drug regulator has lifted a ban on its manufacturing unit in Mexico and that it can start shipping products from the facility to the US.
The street would certainly be concerned about the slower-than-expected revenue growth and decline in operating profit margin