Dr Reddy's loss at Rs 51.9 cr

MIXED BAG OF RESULTS

Operating loss increased by 163%; total revenue dipped by 11%.

Dr Reddy's Laboratories has posted a net loss Rs 51.9 crore for the quarter ended March 31, 2005, against a net profit of Rs 16.2 crore during the corresponding quarter in the previous year.

The operating loss of the company at Rs 78.9 crore in the fourth quarter of 2004-05 increased by 163 per cent from Rs 29.9 crore posted during the last quarter of 2003-04.

According to the audited financial results announced by Dr Reddy's here today, the company's total revenue decreased by 11 per cent from Rs 475.5 crore during the quarter ended March 31, 2004, to Rs 425.2 crore in the fourth quarter of 2004-05.

During 2004-05, Dr Reddy's net profit declined steeply to Rs 21.1 crore from Rs 247.4 crore in the previous year. This translates to a diluted earnings per share (EPS) of Rs 2.76 against Rs 32.32 in 2003-04.

The company's revenue during the year stood at Rs 1,947.2 crore, a 3 per cent decline from the Rs 2,008.1 crore of the previous financial year.

Commenting on the results, G V Prasad, chief executive officer of Dr Reddy's, said: "We had a very challenging year with a significant decline in our net profit. This was due to a combination of factors. Our key products of fluoxetine and tizanidine in the US as well as ramipril in Europe witnessed significant competition, resulting in a steep decline in revenue with no offsetting new product launches. We also had to take a $6.4 million non-cash charge towards our acquisition of Trigensis."

Despite the challenges that Dr Reddy's was facing, Prasad said the company would continue with the implementation of its strategy towards building a future of profitable growth.

Dr Reddy's was working on initiatives to mitigate its research and development investments and would continue to invest in expanding its generics as well as innovation-led pipelines, he said.

Prasad said Dr Reddy's was also focusing on measures to control costs, drive productivity and process excellence across the organisation.

"We are determined to find ways to balance short-term profitability and long-term sustainable and profitable growth," he added.