Highlights:

Matrix Laboratories Limited has reported a net profit of Rs. 100.48 crore on sales of Rs. 340.56 crore on consolidated basis for the third quarter ended 31st December 2005. While the company made an operating profit of Rs. 152.79 crore for the quarter, a total amount of Rs. 52.31 crore has been provided for R&D, interest, depreciation & amortization and tax on consolidated basis.

The annualized earnings per share (EPS) for the quarter on consolidated basis stood at Rs. 14.14 (without annualizing the EPS in respect of exceptional items). Excluding exceptional items, the annualized EPS works out to be Rs. 9.91.

On standalone basis, the company’s sales for the quarter increased by 19.59% at Rs. 198.61 crore. The profit after tax (PAT) for the quarter stood at Rs. 95.83 crore (including exceptional items), as against Rs. 25.55 crore in the corresponding period of last year.

The profit after tax for the quarter includes an amount of Rs. 63.37 crore (net of taxes) arising out of certain exceptional items that include sale of know-how, intangibles and investments including the transfer of one of the manufacturing facilities to a Joint Venture (JV).

Excluding exceptional items, the standalone PAT for the quarter grew by 27% at Rs.32.46 crore. The expenditure on R&D went up by 56.39% at Rs. 7.10 crore during the quarter. The interest cost is also higher at Rs. 2.58 crore as against Rs. 0.92 crore, while the provision for depreciation increased to Rs. 5.89 crore during the quarter as compared with Rs. 4.42 crore in the corresponding period. The company made a tax provision of Rs. 23.15 crore for the quarter, as against Rs. 9.98 crore in the corresponding period last year.

Sequentially, as compared to the second quarter of the current financial year, the company has improved its performance both in terms of topline and bottomline in the third quarter. While the standalone sales increased by 13.90% in the third quarter over the second quarter, the profit after tax (excluding exceptional items) for the same period went up by 6%.

Docpharma NV, the 100% subsidiary of the company, recorded revenues of EUR 26.44 in million (Previous Year: EUR 24.56 million) for the quarter ended 31st December 2005 with a net income of EUR 1.85 million (Previous Year: EUR 1.07 million). On Docpharma front, action plan for key products has been initiated with an objective to optimise the operating margins. Various initiatives taken in this direction are expected to yield results progressively.

On consolidated basis, the sales and net profit for the nine months period ended 31st December 2005 stood at Rs.799.94 crore and Rs.170.11 crore, respectively. Since the consolidation exercise started in July 2005, the above consolidated figures, in effect, pertain to the nine months performance of Matrix standalone, and a part of the six months performance of Docpharma NV and Explora Laboratories SA.

During the quarter, the company has completed the transfer of one of its manufacturing facilities to Astrix Laboratories Limited, a 50:50 joint venture (JV) with Aspen Pharma, South Africa. Effective 1st January 2006, Matrix Laboratories Limited has acquired 50% stake in Fine Chemical Corporation (FCC), South Africa.

The company’s paid-up capital has been increased to Rs. 30.64 crore from 29.94 crore on allotment of 35 lakh equity shares of Rs. 2 each at a price of Rs. 225 per share on preferential basis to the erstwhile promoters of Docpharma on 29th December 2005.

On Finished Dosage Forms (FDF) front, the company has completed the manufacture of first set of ANDA batches meant for the US market. FDF R&D activities have been ramped up in terms of both infrastructure and organization. Under this business segment, the company is working on the development pipeline of 25 products.

“The company is now poised to leverage various strategic initiatives taken in the recent past. The full benefits of these initiatives will be visible in the coming quarters”, said Mr. Rajiv Malik, the Chief Executive Officer (CEO) of Matrix Laboratories Limited.