Reports 17% drop in revenue due to lower sales in EU, North America
Fall in sales volumes in the European Union and the North American markets, due to lower sales of generics pulled down Dr. Reddy's Laboratories' revenues by 17 per cent from Rs. 1,985 crore to Rs. 1,642 crore during the fourth quarter ended March 31, 2010.
In spite of the fall in revenue for the quarter, the company registered a net profit of Rs. 166.70 crore as against a huge loss of Rs. 978 crore in the year-ago period.
As against a net loss of Rs. 518 crore for the whole of 2008-09, the company achieved a profit of Rs. 106 crore in 2009-10. A muted revenue growth of one per cent was registered at Rs. 7,027 crore as against Rs. 6,944 crore in 2008-09, reflecting the impact of decline in the growth of generics in North America and Europe.
The company said the net profit after tax for 2009-10 was Rs. 195 crore, which included impairment charges.
Releasing the unaudited financial results at a press conference here on Thursday, Managing Director K. Satish Reddy and Chief Executive Officer G. V. Prasad, however, said that in spite of certain challenges, profitability increased quite significantly.
The company carried out lot of consolidation in terms of restructuring operations globally, while the strategic alliance with GlaxoSmithkline was progressing well. Tangible revenues from it were expected in two to three years. In the global generics segment, there was a 20 per cent growth each in India and Russia while it declined by 19 per cent in Europe and 15 per cent in North America. The company crossed the Rs. 1,000-crore mark in India with the highest-ever launch of 62 new products. Mr. Reddy and Mr. Prasad said they expected India, the U.S. and Russia to be growth markets in 2010-11.
The return on capital employed (RoCE) could be between 18 per cent and 22 per cent in 2011, they said. They also expressed confidence of the company reaching the $-3-billion goal by 2013.