Wockhardt (WOCKPHARMA) Q4 2005 earnings summary

Executive summary

• FY 2005 sales exceeded Rs 14 billion (US$324 million), with double-digit growth and a reported operating margin of 23.3%.

• Europe became the largest market; US formulation sales grew 50%, while India grew faster than the domestic industry.

• Growth priorities included global generics, biotechnology, R&D and planned medium-to-large acquisitions in Europe and the US.

Financial highlights

• Consolidated sales and services were Rs 14,581.98 million; after excise duty, revenue was Rs 14,120.88 million versus Rs 12,515.94 million in 2004.

• Profit before tax was Rs 2,945.07 million versus Rs 2,505.61 million; net profit after tax was Rs 2,571.01 million versus Rs 2,135.07 million.

• Basic EPS was Rs 23.55 versus Rs 19.59; diluted EPS was Rs 23.53 versus Rs 19.56.

• Sales included Rs 817.87 million of exchange-rate gains, including hedging gains, versus Rs 277.05 million in 2004.

Outlook and guidance

• The 3–5 year ambition was to become one of the world's top generics players, supported by targeted medium-to-large acquisitions in Europe and the US.

• A US$800 million acquisition war chest was being built; US operations were identified as the key near-term growth driver.

• Continued R&D and IPR development were priorities; WCK 771 entered Phase II trials, with potential licensing discussions underway for discovery molecules.