The Hindu : Business : Dr. Reddy’s Lab posts Rs. 517 crore net loss

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Dr. Reddy’s Lab posts Rs. 517 crore net loss

Special Correspondent

— PHOTO: G. KRISHNASWAMY

FOCUSSING ON GROWTH: Satish Reddy (left), Managing Director, and G. V. Prasad, Vice-Chairman, Dr. Reddy’s Laboratories, addressing a press conference in Hyderabad on Monday.

HYDERABAD: Dr. Reddy’s Laboratories reported a net loss of Rs. 517 crore for the year ended March 31, 2009.

Disclosing the results for the fourth quarter and for the whole of 2008-09 here on Monday, Vice-Chairman and CEO G. V. Prasad, however, said that overall revenue stood at Rs. 6,944 crore against Rs. 5,001 crore in the previous year representing a growth of 39 per cent.

The growth was mainly driven by the successful launch of its generic version, Sumatriptan, and excluding revenue from Sumatriptan, the growth was pegged at 24 per cent driven by key markets of North America and Russia.

Mr. Prasad said the net loss was due to the ‘impairment loss’ with respect to intangible assets amounting to Rs. 316.70 crore and goodwill of Rs. 1,085.60 crore related to its acquisition of German pharmaceutical company Betapharm three years ago.

Mr. Prasad explained that the non-cash impairment loss was an exception to German subsidiary as it readjusted its business model. As a result, Dr. Reddy’s had to devalue Rs. 1,400 crore on the value of its acquisition. He said even other German companies were affected like Betapharm due to change in the business model. Satish Reddy, Managing Director, said revenues from pharmaceutical services and active ingredients increased by 13 per cent to Rs. 1,880 crore in the year under reference from Rs. 1,660 crore in 2007-08. With regard to global generics, revenue stood at Rs. 4,980 crore against Rs. 3,300 crore, a growth of 51 per cent.

In India, revenue increased by 5 per cent while it was 147 per cent in North America, and 16 per cent in Europe.

The directors have recommended a dividend of Rs. 6.25 per share of Rs. 5 face value for 2008-09.

The company launched 116 new generic products, filed 110 new generic product registrations and filed 55 DMFs (drug master files) globally during the year, he said.

For 2009-10, the target growth is 10 per cent and profitability between 16 per cent and 19 per cent and the company was confident that the second half would be good. With comfortable global footprint, the company now would focus on profitable growth, he said.

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