Dr Reddy’s Labs posts Rs 570 crore loss on impairment charges

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January 28, 2020 2:10 AM

In December 2019, there was a generic and an authorised generic launch for Nuvaring, which led to a considerable erosion in the value of this product.

The company had reported profits of Rs 485.2 crore in the year-ago period and Rs 1,092.5 crore for the July-September quarter.

Pharma major Dr Reddy’s Laboratories has posted a loss of Rs 569.7 crore for the third quarter of the current fiscal due to impairment charge for non-current assets, including generic Nuvaring drug. The company had reported profits of Rs 485.2 crore in the year-ago period and Rs 1,092.5 crore for the July-September quarter. Revenues grew 13.86% year-on-year to Rs 4,383.8 crore from Rs 3,850 crore during the same quarter last year.

“The current quarter performance has been good across all our businesses and we achieved strong EBITDA margins. Profits were impacted due to a trigger-based impairment charge taken on a few products including Nuvaring. We continue to focus on execution and have made significant progress on quality systems and operational efficiencies,” co-chairman and managing director GV Prasad said.

In December 2019, there was a generic and an authorised generic launch for Nuvaring, which led to a considerable erosion in the value of this product.

“In addition to this, considering the current market dynamics, we have taken an impairment charge of Rs 210 crore on intangibles pertaining to other products. In total, we have taken an impairment of Rs 1,320 crore on the intangible assets for this quarter,” the company said in a statement.

The pharmaceutical services and active ingredients (PSAI) segment increased 16% Y-o-Y during the quarter ended December 2019. Revenues from proprietary products and others declined 18% Y-o-Y to Rs 100.5 crore. The company spent Rs 390 crore towards research and development expenses during the October-December quarter.

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