Delivering on Our Commitment
I am delighted to share with you my thoughts at the end of what has been a satisfying financial year for Laurus Labs. Amid an uncertain global economic environment and challenging industry dynamics we continued to perform with resilience. This performance has been supported by our relentless focus on integrating our diverse capabilities and resources commitment to quality that is at par with global standards manufacturing excellence and strong supply chain capabilities.
We registered our highest ever revenue EBITDA and profitability during the reporting year. Our formulations business led by LMIC tender business continues to deliver robust growth resulting in 30% revenue contribution for the year. Along with the tender business we are also pursuing emerging opportunities in developed markets of North America and Europe. We continue to file 8-10 ANDAs a year as we see many long-term opportunities in the US generics space. On the other hand our Custom Synthesis business sustained its growth trajectory with higher volumes from the CDMO business. With higher volumes and introduction of new products our `Other API' business segment has registered attractive growth during the year. We do expect this growth rate to continue and improve in the coming quarters. Our integrated strategy is delivering outcomes and we are investing in the future to drive sustainable long-term growth. With the improvement in margins and profitability in 2019-20 and the COVID impact on supply chain petering out soon we remain highly optimistic of delivering even better performance across parameters going forward. As a responsible corporate citizen we are equally committed to help address the COVID-19 outbreak. We have prioritised the safety of our employees continued the supply of our medicines to patients and ensured the health of the communities where we live and work.
Foundation continues to be strong
We have delivered more value from our differentiated market portfolio successfully launched new products become a more trusted strategic partner for customers and improved service standards. Also we have increased capacity utilisation and improved business processes. Besides we simplified our organisational structure implementing crucial changes that mean operational decisionmakers intellectual property and business activities are now more closely located and aligned.
We have reached maximum utilisation levels of our formulation unit and with healthy outlook and order book we continue to invest further in our FDF infrastructure and also in the development. When it comes to ARV our degrowth stemmed primarily from lack of clarity on the awards of supplementary tender in South Africa where our key customers are not building up inventory.
Once the tender results are clear we will be able to improve our ARV sales in the coming quarters. We have completed filing of our second line ARV APIs of Lopinavir and Ritonavir and we expect to do formulation development of second line API as well. In the other API segment we performed well the growth was primarily driven by contract manufacturing of APIs to other generic companies. Synthesis business continued to show gains in line with scale up in engagement with Aspen. Our consolidated revenues stood at Rs.28317 million in 2019-20 against Rs.22919 million in 2018-19. We have once again demonstrated excellence in our operational efficiencies. Our EBIDTA grew by 53% to Rs.5695 million vis--vis Rs. 3712 million in the previous year. Our PAT grew by 172% to Rs.2553 million in 2019-20. For the year ending March 2020 we declared an interim dividend of 15% amounting to Rs.1.5 per share. Our asset utilisation rates have improved with Unit 2 running at near full capacity. With attractive business opportunities and healthy order book for 2020-21 we continue to invest in our FDF infrastructure. At the same time we remain confident of achieving positive free cash flow status from 2020-21 onwards.
Broad stakeholder engagement
We are committed to engaging with our stakeholders including shareholders patients healthcare professionals customers suppliers regulators and the communities in which we operate. Continuous engagement with a broad fraternity of stakeholders informs our day-to-day commercial and operational decisions as well as our long-term investments in our business and our people. This helps fulfil our commitment to operate as a high-quality reliable source of essential medicines.
Sustainable for good reasons
During the year we continued to strengthen our Environment Social and Governance (ESG) performance. On the environment front we are working towards reducing our carbon footprint plastic use and optimising the use of water in our manufacturing facilities. On the community front we are extending need-based interventions in our focus areas and stepping up our COVID relief measures to the disadvantaged sections. You can read more about those initiatives in other sections of the Report.
A sustainable and fast-growing enterprise like ours moves on the knowledge innovation and commitment of the talent pool. During the year we undertook several employee training and development initiatives to upskill our workforce to stay ahead in the markets in which we operate.
Execution with research-first approach
We are reinforcing our R&D backbone through prudent investments to ensure a sustainable pipeline of new products and services to which our customers can have easy access. Also our emphasis on automation and quality control ensured a good compliance track record.
Across our manufacturing sites we set up quality systems that encompass all areas of business processes including supply chain product delivery quality efficiency and safety of products. We are committed to working closely with our suppliers and making far-reaching changes across our value chain by encouraging our business partners suppliers and contractors to adopt responsible and sustainable practices.
The challenges that we are facing owing to the unprecedented health emergency and consequent cessation of economic activity will be temporary and can impact a couple of quarters going forward. However we are confident that our integrated capabilities and execution brilliance will continue to drive our brand prominence globally. I am confident I will have more interesting developments to share in my next letter to you. I am thankful to our customers employees investors regulators and all other stakeholders for their vision and guidance. Wishing you all a safe and prosperous future.
Dr. C. Satyanarayana
Chief Executive Officer.