Wockhardt Third Quarter Gross Profit up 32% at Rs. 80 crores
Three products launched in US under Wockhardt banner

Mumbai, October 20, 2004

Pharmaceutical major Wockhardt Limited reported a gross profit of Rs. 80 crores for the quarter ended September 30, 2004, posting a 32% growth over the corresponding quarter of 2003. Sales at Rs. 317.5 crores posted an 11.3% growth over the third quarter of 2003. Operating margins rose to 25% during the quarter, up from 21%. Despite a 97% increase in tax provision and a substantial increase in interest burden, the net profit grew by a healthy 13% to Rs. 55.8 crores, as per the unaudited, consolidated financial results released after a board meeting today.

“The third quarter saw three major events that will define Wockhardt’s growth in the global arena in the years to come,” Wockhardt chairman Mr. Habil Khorakiwala said.

“The most important event was the launch of Wockhardt Biotech Park, India’s largest biopharmaceuticals complex by the President of India Dr. APJ Abdul Kalam in September. It was followed by the successful $110 million foreign currency convertible bond (FCCB) to fund new acquisitions in Europe, our largest market outside India. The third event was the start of commercial operations at Wockhardt USA,” he added.

Wockhardt recorded sales of Rs. 895.1 crores during the first nine months of 2004, posting a 36% increase over the corresponding nine months of 2003. Operating profit jumped 73% to Rs. 207 crores for the nine-month period. Operating margins improved by 495 basis points to 23.1%.

The net profit of Rs. 150 crores for the nine months represents a 63% increase over the corresponding nine months of 2003. During the first nine months of 2004, the company achieved a net profit that is even higher than what it had achieved during the 12 months ended December 2003.

Wockhardt’s domestic business grew by 11% during the third quarter, reflecting the positive impact of restructuring of the domestic operations. Power brands continue to contribute the lion’s share of domestic business (80%) with a growth rate of 18%.

Revenue from the biotechnology portfolio grew by 81% over the same period last year. Sales of Wosulin, Wockhardt’s brand of recombinant insulin, have crossed the Rs. 1 crore per month mark. Overall, Wockhardt’s diabetology portfolio grew by 77% during the quarter. Wockhardt achieved a biotechnology research breakthrough by developing glargine, an advance on insulin, and is the first company to do so after the innovator.

The third quarter saw the completion of integration of Wockhardt’s UK operations and the sale of Luton manufacturing facilities. “This will improve the efficiency and profitability of Wockhardt’s UK operations,” Mr. Khorakiwala said. “The combined operations of Wallis and CP Pharmaceuticals under the umbrella of Wockhardt UK Ltd. will be the growth engine of the UK operations,” he added.

The successful integration of the German business of esparma GmbH has opened up the development of European business through mutual recognition route for esparma products in UK and CP products in Germany.

Wockhardt USA Inc. began selling two products, enalapril and bethanechol chloride, directly to the US market during the quarter. Wockhardt now has three products (the third being captopril) under its own label in the US. The company’s US business is poised for a rapid growth in the light of US FDA approval for six of Wockhardt’s manufacturing sites in India.
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Wockhardt is one of India’s premier research and technology-based pharmaceutical companies and a front-runner in biotechnology. Wockhardt has a wide global reach and over the past two years, it has made two successful acquisitions in Europe and established its own sales and marketing organisation in the US. About 60% of Wockhardt’s sales come from international markets. Sales in dollar terms have grown from $25 million 10 years ago to $250 million.

View Consolidated Unaudited Financial Results for the Quarter ended 30 September, 2004