GSKCH's profitability during CY20 remains flat

MG News | March 05, 2021 at 05:41 PM GMT+05:00

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March 5, 2021 (MLN): Glaxo SmithKline Consumer HealthCare Pakistan Limited (GSKCH) has announced its financial performance for the CY20, as per which the company’s net profits after tax remained flat at Rs 1.26 billion with Earnings per share stood at Rs 10.78/sh.

Alongside financial results, the company announced a cash dividend of Rs 5/sh i.e. 50% for the year 2020.

Despite the increase in net sales by 21.6% YoY, the gross margin of the company shrank to 27% from 31% in CY19. This dilution was attributable to an adverse sales mix resulting from greater demand for lower-margin products (e.g. Vitamins and Pain products). Furthermore, the additional market demand for Panadol was met through the procurement of raw material at increased prices due to the supply situation in China.

On the cost front, the company witnessed a 13% YoY increase in its selling and marketing cost, while its admin and other operating expenses surged by a mere 2% and 8% YoY respectively. The company also observed a 34.5% YoY increase in income earned from other sources, nonetheless, the impact of higher operating cost and lower other income was offset by 69.84% YoY decline in financial charges.

Moreover, the company’s effective tax rate came in at 29% compared to 26% in the comparative year.

Financial Results for the Year ended December 31, 2020 (Rupees)
	Dec-20	Dec-19	% Change
Net sales	19,846,106,200	16,316,744,549	21.63%
Cost of sales	(14,518,243,501)	(11,330,677,070)	28.13%
Gross profit	5,327,862,699	4,986,067,479	6.86%
Selling, marketing and distribution expenses	(3,098,439,077)	(2,739,642,160)	13.10%
Administrative expenses	(289,759,267)	(283,361,186)	2.26%
Other operating expenses	(154,286,291)	(142,592,667)	8.20%
Other income	46,922,471	71,671,539	-34.53%
Operating profit/(loss)	1,832,300,535	1,892,143,005	-3.16%
Financial cost	(58,008,181)	(192,365,037)	-69.84%
Profit/(loss) before taxation	1,774,292,354	1,699,777,968	4.38%
Taxation	(512,283,767)	(442,259,158)	15.83%
Profit/(loss) after taxation	1,262,008,587	1,257,518,810	0.36%
Earnings per share - basic and diluted (Rupees)	10.78	10.74	0.37%

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