Aurobindo Pharma reports 21.7 per cent decline in profit, says expenses up

Drug major Aurobindo Pharma Limited on Monday reported a 21.7 per cent decline in net profit at Rs 6.11 billion for the quarter ended September 2018, owing to rise in costs. The company's net profit was Rs 7.81 billion in the corresponding quarter previous year.

Total income for the quarter under review grew 7.42 per cent to Rs 47.78 billion helped by increased sales revenue from the US and other countries as compared with Rs 44.46 billion in the year-ago period.

The overall expenses during the quarter under review stood at Rs 39.64 billion, an increase of 14.3 per cent over Rs 34.68 billion in the corresponding previous quarter and in that the material costs rose 30 per cent besides an increase in employee costs among other things.

The company was able to improve its US formulations revenues by 6.1 per cent year-on-year at Rs 22.27 billion during the period. However, Europe formulations sales posted a lower growth of 3.9 per cent at Rs 11.56 billion. Overall formulations sales for the quarter posted a growth of 7.4 per cent at Rs 39.35 billion and accounted for 82.8 per cent of the total sales. 

Sales in growth markets and ARV sales grew 26 per cent and 17 per cent during the quarter though their contribution to the overall revenues was just about Rs 7 billion. Exports contributed 90 per cent 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 per cent YoY, EBITDA margin for the quarter was at 21.6 per cent," said company managing director N Govindarajan. 

The company's board of directors of the company approved an interim dividend at the rate of 125 per cent, i.e., Rs 1.25 per equity share of Rs 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 $ 12.5 million. The deal is expected to be completed by January, 2019, according to the company.