Aventis Pharma Limited has announced its unaudited results for the quarter ended 31st March 2003. The Company reported that net sales (excl. excise duty) increased by 5 per cent to Rs. 144.70 crore. The EBIDTA (before exceptional items) was Rs 25 crore (17.3 per cent of sales) compared to Rs 20.60 crore (15.0 per cent of sales) – an increase of 21 per cent in quarter ended 31st March 2003 compared with quarter ended 31st March 2002. The PBT before exceptional items rose 26 per cent to Rs 21 crore. Net Profit after Tax & exceptional items was Rs 19 crore compared to Rs 10.70 crore – an increase of 78 per cent. Earnings Per Share (EPS) for the quarter was Rs 8.26.

Exceptional income during the quarter under review was on account of one time special discount received from suppliers. Exceptional expense is on account of amortization of marketing and technical rights.

Domestic trading conditions in the quarter were badly affected by the uncertainty surrounding the implementation of VAT. The exact impact on Q1 sales is impossible to quantify as trade reactions varied across the country, with a general unwillingness to purchase. The uncertainty continues, as it remains unclear how, when and by which states, VAT will eventually be implemented, as also the mechanics of such an implementation.

While the VAT issue has distorted some performance comparisons, strategic brands continued to perform strongly, growing as a group by 15 per cent in the quarter, led by Clexane (34 per cent), Cardace (26 per cent), Amaryl (25 per cent) & Targocid (33 per cent), reflecting the strong brand equity and secondary demand for these brands. Tavanic declined by 38 per cent as the Company reduced its investments in this highly competitive category.

The Company's other major brands continue to maintain their strong leadership positions in their segments, with double-digit growths achieved in Rabipur and Soframycin. Avil and Combiflam showed single-digit growths, while Daonil declined in the quarter, but remained leader in its category.

Exports were Rs 33.20 crore (Direct Rs 31.20 crore and Indirect Rs 2 crore) in the quarter under review as against Rs 31.60 crore (Direct Rs 26.80 crore and Indirect Rs 4.8 crore) in the corresponding quarter of 2002, a growth of 5 per cent. Regulatory changes have affected shipments to Russia in the first quarter, but a recovery is expected through the rest of 2003.

Commenting on the Company's results, Ramesh Subrahmanian, Managing Director, Aventis Pharma Limited, said, “Despite the significantly disrupted trading conditions in the domestic market due to the confusion around implementation of VAT, we have been able to generate top-line growth and have grown earnings significantly. This reinforces our strategic focus on building brand leadership and enhances our commitment to serve patients and physicians better with innovative therapies. We look forward to an early & clear resolution on VAT, to put this critical industry back on the growth track. In the absence of such clarity, and the additional business disruption caused by the recent transport strike, the outlook for the current quarter is at best uncertain.”