Biocon (BIOCON) Q4 03/04 earnings summary

Executive summary

• FY04 marked the transition to an integrated biopharmaceutical and drug-development business, combining manufacturing, custom research and clinical research capabilities.

• Consolidated Indian GAAP total income rose 94% to Rs 5,493m; operating profit reached Rs 1,796m and PAT rose to Rs 1,386m.

• Growth was led by biopharmaceuticals, especially statins, alongside exports and research services; major capacity and product investments support the next phase.

Financial highlights

• Consolidated Indian GAAP revenue was Rs 5,493m versus Rs 2,833m in FY03; PAT was Rs 1,386m versus Rs 435m, up 219% per the financial highlights chart.

• Standalone total revenues rose 99.6% to Rs 5,112m; PAT increased 247.5% to Rs 1,247m, and net margin expanded to 24.4% from 14%.

• Consolidated exports rose to Rs 3,395m from Rs 1,355m; exports represented 63% of revenue versus 48% in FY03.

• US GAAP consolidated revenue was Rs 5,406m, gross profit Rs 2,213m at 40.9% margin, operating income Rs 1,549m and net income Rs 1,352m.

• Other income included Rs 77m of standalone net exchange gains in FY04, versus Rs 8m in FY03; this contributed to reported income growth.

Outlook and guidance

• FY05 growth drivers identified: European Pravastatin sales, new Insulin and Immunosuppressant products, branded formulations and expanded research services.

• Statin manufacturing capacity was expected to become available in Q1 2005; capacity constraints were expected to ease as projects under implementation reached fruition in Q4 FY05.

• Insugen launch awaited regulatory approval; generic insulin exports targeted semi- and non-regulated markets in the near term and regulated markets in the medium term.

• Syngene’s new research facility was expected to be operational in calendar H2 2004; the biologicals facility was targeted for completion in FY06.