The Hindu Business Line : Strides net dips 15% in Q4

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Bangalore Jan. 30 Strides Arcolab Ltd has reported 15.11 per cent dip in its standalone Q4 profit after tax of Rs 12.97 crore year on year while posting 37.5 per cent sales growth at Rs 129.2 crore.

PAT of Rs 36.18 crore for the full year ended December 2006 also was 21.5 per cent lower. Annual sales of Rs 455.08 crore showed a 37.5 per cent increase over the previous year's net sales of Rs 331.07 crore. It said the second quarter saw significant capacity constraints in the domestic plants.

The board has recommended a dividend of Rs 2 per equity share of Rs 10.

The cephalosporin block started production in 2006 and the sterile products facility was upgraded. Work on a new oncology facility in Bangalore began in November 2006.

For the current fiscal, the company expects to keep the 27-28 per cent growth rate. Mr Arun Kumar, Vice-Chairman and MD, said, "2006 has been a strong growth year. Significant investments in growth strategies and R&D pipeline will ensure that the company emerges as a significant player."

GLOBAL GROWTH

The group has operations in the US, Europe and Latin America and has three joint ventures. On a consolidated basis, the full year's global revenues grew 43 per cent to touch Rs 760 crore (Rs 532.6 crore). Consolidated PAT and minority interest was Rs 40 crore, registering 17 per cent drop over previous year due to increased provision for tax in the Latin American operations.

Consolidated Q4 PAT was Rs 14 crore (Rs 6 crore); revenues touched a record Rs 270 crore (Rs 159 crore) registering 70 per cent increase year-on-year and 48 per cent sequentially.

It said the fall in the margins was due to capacity-related problems. The US facility was closed for most part of the year for conversion from manufacturing nutritionals to prescription drugs in tune with its changing soft gelatin strategy. This caused loss of Rs 19.5 crore. Now fully commissioned, the facility is expected turn around in 2008.

The underutilisation of capacities in its Polish facility led to a loss of Rs 3 crore. Regulatory filings from Poland will commence in 2008. The two joint ventures in the US and one in Turkey, all in their infancy, incurred operating losses of Rs 5.2 crore. These are expected to start yielding revenues from the first half of 2008. R&D expenditure increased beyond income due to accelerated clinical and regulatory strategy.

REGULATED MARKET

Regulated market sales registered 22 per cent growth to reach Rs 210 crore. Latin American operations registered 60 per cent growth. In the first year of filing with the USFDA, Strides and its partners filed 30 ANDAs (abbreviated new drug applications) and NDAs and received FDA approvals for five HIV drugs. During the year, it acquired Beltapharm in Italy, the Valeant steriles facility in Poland and DHA in Singapore.

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