Wockhardt (WOCKPHARMA) Q4 2004 earnings summary

Executive summary

• FY04 consolidated sales reached Rs. 12,388.63 million, up 32% YoY; net profit rose 50% to Rs. 2,135.07 million.

• International operations expanded across 90+ countries; USA and Western Europe contributed over 50% of consolidated revenue, up from 43% in 2003.

• Strategic emphasis was on global generics, biopharmaceuticals and R&D, supported by acquisitions, new market operations and expanded manufacturing capacity.

Financial highlights

• Consolidated revenue, net of excise duty, was Rs. 12,388.63 million versus Rs. 9,420.47 million in 2003; consolidated PBT was Rs. 2,505.61 million.

• Consolidated net profit was Rs. 2,135.07 million versus Rs. 1,426.06 million; reported basic and diluted EPS were Rs. 19.59 and Rs. 19.56.

• Standalone operating income rose to Rs. 8,468 million from Rs. 7,295 million; standalone PAT was Rs. 2,077.77 million versus Rs. 1,333.59 million.

• Consolidated operating cash flow was Rs. 2,092.66 million; cash and equivalents ended FY04 at Rs. 7,354.84 million.

• Consolidated R&D investment rose 45% to Rs. 943.90 million; standalone R&D spend was Rs. 692.80 million.

Outlook and guidance

• UK restructuring benefits were expected to become more visible in 2005, following right-sizing, product optimisation, manufacturing shifts to India and supply-chain integration.

• esparma targeted 15% sales growth and ~50% growth in operating annual result for 2005, supported by new product launches and cost reduction efforts.

• Biopharma plans targeted 25 additional international registrations by 2006 and marketing in 19 countries; Glargine launch was scheduled for 2006.

• Industry opportunities included US patent expiries representing US$19.5 billion in branded revenues and 82 generic opportunities in 2005–06 worth nearly US$23.5 billion.