Aurobindo Pharma Reports 21.7 Percent Decline in Profit, Says Expenses Up

Drug major Aurobindo Pharma Limited reported a 21.7 percent decline in net profit at ₹6.11 billion for the quarter ended September 2018, owing to rise in costs. The company’s net profit was ₹7.81 billion in the corresponding quarter previous year. Total income for the quarter under review grew 7.42 percent to ₹47.78 billion helped by increased sales revenue from the US and other countries as compared with ₹44.46 billion in the year-ago period. The overall expenses during the quarter under review stood at ₹39.64 billion, an increase of 14.3 percent over ₹34.68 billion in the corresponding previous quarter and in that the material costs rose 30 percent besides an increase in employee costs among other things.

The company was able to improve its US formulations revenues by 6.1 percent year-on-year at ₹22.27 billion during the period. However, Europe formulations sales posted a lower growth of 3.9 percent at ₹11.56 billion. Overall formulations sales for the quarter posted a growth of 7.4 percent at ₹39.35 billion and accounted for 82.8 percent of the total sales. Sales in growth markets and ARV sales grew 26 percent and 17 percent during the quarter though their contribution to the overall revenues was just about ₹7 billion. Exports contributed 90 percent to the company’s total revenues in this quarter.

“We have delivered a healthy quarter in terms of both financial performance and developments in differentiated portfolio. Our revenues increased by 7 percent YoY, EBITDA margin for the quarter was at 21.6 percent,” said company managing director N Govindarajan. The company’s board of directors of the company approved an interim dividend at the rate of 125 percent, i.e., ₹1.25 per equity share of ₹1 for the year 2018-19. The company’s wholly owned subsidiary, Aurobindo Pharma USA Inc., USA, has entered into an agreement to acquire a product under development and related assets from Advent Pharmaceuticals Pty Limited in an all cash deal for USD 12.5 million. The deal is expected to be completed by January, 2019, according to the company. – Business Standard