February 9, 2022 (MLN): GlaxoSmithKline Consumer healthcare Pakistan Limited (GSKCH) aims to secure better shareholder returns in future by investing more in the capacity building of its core brands including Panadol and CaC-1000 Plus.
The company has disclosed its financial performance today for CY21. Alongside financial results, the Board of Directors of the company explained the reasons for not declaring dividends despite witnessing a growth of 69% YoY in net profits.
“(GSKCH) can secure better shareholder returns in future by investing more in the capacity building of its core brands including Panadol and CaC-1000 Plus. Further, the recent imposition of sales tax on Active Pharmaceutical Ingredients (APIs) will also put a strain on future liquid resources,” the company said.
Consequently, the Board of Directors has decided against recommending dividends for the year ended 2021, it added.
As per GSKCH’s financial statement, the company has delivered a fine profit and earnings per share for the year 2021 as its net profitability clocked in at Rs2.13 billion for CY21, which was 69% higher than the profits of Rs1.26 billion last year.
The earnings per share of the company also jumped from Rs10.78 in CY20 to Rs18.23.
The turnover of the company was recorded at Rs24.16 billion, up by 21.7% YoY, mainly driven by an increase in demand and underlying consumption trends. The company generates 80% of the revenue from the brand portfolio constitutes OTC brands such as Panadol, Cac-100 while the rest of 20% is generated by FMCG brands.
Despite higher revenues, the gross margin improved a little to 27.37% in CY21 compared to 26.8% last year due to an increase in costs. Consequent to the closure of a major Chinese supplier of Paracetamol (i.e., the key raw material of Panadol), its prices have been constantly increasing since January 2021. In addition to these unsustainable levels of paracetamol prices, the devaluation of the Pakistani Rupee has added to the cost pressures.
On the cost front, the company witnessed an 8% YoY increase in its selling and marketing cost, while its admin and other operating expenses surged by 12% and 58% YoY respectively.
Moreover, the company’s effective tax rate remained unchanged at 29% in CY21.
|
Financial Results for the Year ended December 31, 2021 (Rupees 000) |
|||
|---|---|---|---|
|
|
Dec-21 |
Dec-20 |
% Change |
|
Net sales |
24,163,150 |
19,846,106 |
21.75% |
|
Cost of sales |
(17,548,075) |
(14,518,244) |
20.87% |
|
Gross profit |
6,615,075 |
5,327,862 |
24.16% |
|
Selling, marketing and distribution expenses |
(3,353,640) |
(3,098,439) |
8.24% |
|
Administrative expenses |
(325,084) |
(289,759) |
12.19% |
|
Other operating expenses |
(244,517) |
(154,287) |
58.48% |
|
Other income |
341,403 |
46,923 |
627.58% |
|
Operating profit/(loss) |
3,033,237 |
1,832,300 |
65.54% |
|
Financial cost |
(17,133) |
(58,008) |
-70.46% |
|
Profit/(loss) before taxation |
3,016,104 |
1,774,292 |
69.99% |
|
Taxation |
(881,770) |
(512,283) |
72.13% |
|
Profit/(loss) after taxation |
2,134,334 |
1,262,009 |
69.12% |
|
Earnings per share – basic and diluted (Rupees) |
18.23 |
10.78 |
69.11% |
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