GSK’s revenue drops 13% amid pandemic

GlaxoSmithKline (GSK) Bangladesh Limited has posted a 13 percent drop in its revenue in the April to June quarter of this year, owing to a supply disruption during the countrywide general holidays put in force to curb the spread of Covid-19.

During the period, the company's revenue stood at Tk94.27 crore, down from Tk108.74 crore in the same period of the previous year, according to GSK's unaudited financial statements.

In the first half - January to June - of this year, the total revenue of the company decreased 9 percent to Tk209.70 crore as compared to the same period of the previous year.

However, GSK's net profit increased by 2 percent during the second quarter this year.

In the first half of 2020, the company's net profit increased 19 percent to Tk31.76 crore. However, its net operating cash flow per share decreased by 83 percent to Tk6.49.

"Despite a decrease in its revenue, GSK's net profit increased because of a higher finance income and lower loss from discontinued operation of its pharmaceutical business in Bangladesh in 2018," said a company official to The Business Standard.

"But net operating cash flow per share dropped due to lower sales and decreased collection of receivables caused by the Covid-19 shutdown," he added.

The net asset value (NAV) per share of the company increased 45 percent to Tk105.51 in the first half of 2020 as compared to the same period of 2019.

The official also said consistency in smooth business performance and an increase in retained earnings have resulted in this rise in NAV per share.

GSK's earnings per share (EPS) was Tk11.40 during the April-June quarter of 2020, up from Tk11.19 in the same period of the last year. Its EPS was Tk26.37 in the first half of this year.

The company has paid 530 percent cash dividend to its shareholders for the last year.

After discontinuation of its pharmaceutical business in Bangladesh in 2018, GSK continued its operation with the consumer healthcare business throughout 2019.

At present, Horlicks contributes around 93 percent of GSK BD's annual sales. The rest comes mainly from Sensodyne toothpaste, though there are some minor products like over the counter antacid brand Eno.

Unilever, as part of the global transaction with GlaxoSmithKline, has acquired the majority shares of GlaxoSmithKline Bangladesh Ltd.

Effective from July 1 this year, GSK is now a part of the Unilever Group of companies, focusing on the consumer healthcare nutrition business.

Unilever Bangladesh in a press release said GlaxoSmithKline Bangladesh Limited will continue as an entity with the new name - Unilever Consumer Care Ltd. All the products – Horlicks, Boost and Glaxose-D – in the market will continue to be the entity's products.

On the potential of the health food drinks and nutrition products portfolio, Unilever said, "The nutrition and health drinks category has remained under-penetrated in Bangladesh."

"Unilever Bangladesh is well positioned to further develop the market given the extent of its reach and capabilities. There is a huge growth potential in bringing the best of GSK's brands and equity with the strengths of the Unilever Bangladesh Limited's go-to-market capabilities."

GSK Group will continue its remaining products - Sensodyne and over the counter Eno - in Bangladesh through its subsidiary Burroughs Wellcome & Company (Bangladesh) Limited.

GSK BD was listed with the Dhaka Stock Exchange (DSE) in 1976 and its paid up capital is Tk12.04 crore.

The closing price of the company's each share was Tk2,161.30 on Wednesday at the DSE.