GSK half year profits rise on the back of lower taxes

GlaxoSmithKline’s half-year profits have increased by about 7% as the company reported a half-year profit of Rs 328.9 million, compared to a profit of Rs 307.5 million a year ago.

The financial results of the company were approved at the Board of Directors meeting held on August 20, 2018.

According to the financial statements, even though the overall profit of the firm increased by 7% over the year, the resultant increase could be attributed to a close to 41% decrease in the taxes charged to the firm on the profits before taxation.

Even though net sales increased by 10.71% for the half year ended on June 30, 2018, the increase in the cost of sales outpaced the growth in net sales as costs increased by 18.27% over this period, resulting in a gross profit increase of merely 0.13%.

An increase expenses, primarily selling, marketing and distribution expenses, along with administrative expenses resulted in a 14.46% decline in operating profits of the firm.

Coupled with an exponential increase in financial charges, before tax profits of the firm declined by 16%. Since lower profits prompt lower taxes, the company reported an overall profit increase of 6.98%.

The company also declared an Earnings per share of Rs 3.44, compared to Rs 3.22 declared on June 30, 2017.