Cipla Curtails Losses In Q4 But Misses Analysts Estimates

Cipla’s losses narrowed from the corresponding quarter last year.

25 May 2017, 08:21 PM IST

Vaccine vials move along the conveyor of a machine during inspection and screening for defects at the Serum Institute of India Ltd. pharmaceutical plant in Pune, Maharashtra, India. (Photographer: Sanjit Das/Bloomberg)

Cipla Ltd. posted a net loss during the quarter ended March 31 for the financial year 2016-17 owing to a tough operating environment and certain one-offs.

The one-time cost during the quarter was on account of impairment of a part of intangibles from the company's U.S. acquisition of Rs 214 crore and a provision worth Rs 56 crore for loss on certain assets on its subsidiary Cipla BioTech Pvt. Ltd, the company said in a stock exchange filing.

Consolidated net loss for the quarter narrowed to Rs 62 crore compared to a loss of Rs 93 crore during the corresponding quarter last year. The number was a huge miss on the Bloomberg consensus estimate which stood at Rs 338 crore.

Net sales for jumped 7.2 percent to Rs 3,487 crore compared to Rs 3,253 crore during the year-ago period due to strong growth in U.S. and South African markets. Total income from operations grew 8.1 percent from last year to Rs 3,582 crore. Other income for the January-March period stood at Rs 23 crore, a decline of 61.6 percent from the previous year.

Cipla Curtails Losses In Q4 But Misses Analysts Estimates

Earnings before interest, tax, depreciation and amortisation of the pharmaceutical major grew 191.1 percent to Rs 506 crore on a year-on-year basis while EBITDA margins expanded 890 basis points to 14.1 percent led by cost control measures and better product mix.

While the quarterly results are off the mark due to a tough operating environment and certain one-offs, we delivered on our goal of improving base EBITDA percentage year-on-year by more than 200 bps.

Umang Vohra, Managing Director and Global CEO, Cipla

Geographic Revenue

Revenue from the India business declined 4 percent on a year-on-year basis to Rs 1,197 crore largely driven by de-stocking at the channel.
Revenue from North America grew 33 percent to Rs 646 crore compared to the year ago period. While Q4FY16 included the contribution from Esomeprezole, Q4FY17 includes the impact of full contribution of Invagen.
South Africa was the other key market where revenue jumped 50 percent to Rs 468 crore. Cipla saw a strong growth across both private market and tender business in South Africa, it said in a separate media statement.
Revenue from other emerging markets saw a decline of 9 percent to Rs 813 crore due to currency volatility, impact of rationalisation and tender-phasing. The company continues to explore in-licensing opportunities in emerging markets.
Revenue from Europe grew 8 percent to Rs 180 crore year-on-year.

While the company filed 32 drug applications (ANDAs) in the U.S. in FY17, it aims to file more than 20 ANDA filings in the financial year 2017-18, Umang Vohra, managing director of Cipla said in a media briefing to announce the company’s earnings.

Corrects an earlier version which pegged the number of likely ANDAs for FY18 at 28.