Cipla (CIPLA) Q4 06/07 earnings summary

Executive summary

• FY07 turnover Rs. 3,533 crore, up 17% YoY; net profit Rs. 668 crore, up nearly 10%, with profit margin on operating income slightly lower due to higher material costs and product mix.

• Exports exceeded Rs. 1,750 crore and accounted for over 50% of sales; products reached 180 countries.

Financial highlights

• Net sales Rs. 3,438.24 crore vs Rs. 2,891.36 crore; gross sales Rs. 3,533.17 crore vs Rs. 3,019.68 crore.

• Profit before tax Rs. 807.98 crore vs Rs. 709.84 crore; profit after tax Rs. 668.03 crore vs Rs. 607.64 crore.

• Material costs rose to Rs. 1,725.58 crore from Rs. 1,411.57 crore; other income increased to Rs. 230.55 crore from Rs. 188.27 crore.

• Net foreign-exchange gain credited to P&L was Rs. 32.98 crore vs a Rs. 10.58 crore loss in FY06.

Outlook and guidance

• Domestic strategy focused on consolidating brands, launching products and dosage forms, and increasing market penetration to grow share.

• International growth priorities included partnerships and agency arrangements; US alliances covered over 125 products, with over 100 US DMF registrations and over 85 in Europe.

• Kurkumbh and Bangalore export-oriented projects were expected to be completed by March 2008; formulation SEZ projects were being set up in Indore and Goa.