GlaxoSmithKline Consumer Healthcare Pakistan Limited (PSX: GSKCH) recently announced its financial performance for the half-year ended June 30, 2022. A look at the company notice released to the Pakistan Stock Exchange yesterday shows that GSKCH’s sales grew by 19percent year-on-year in 1HCY22. The 2QCY22 sales were up by six percent year-on-year.
The company’s earnings in 1HCY22 was however, pushed down significantly due to external factors and political instability. The company’s earnings were impacted by consistently high commodity prices and macro-economic instability as well as depreciating currency.
In terms of volumetric growth, the company performed well as it posted a strong growth of 36 percent over the corresponding period last year. The company’s core business grew by 21 percent year-on-year driven by growth in demand and company’s commercial and marketing strategy. The OTC segment growth was competitive in the latest quarter where growth was led by double digit growth in Respiratory, Pain Management (PM) and Skin Health sub-segments.
The decline in FMCG portfolio was due to rising inflation and hence lower consumer purchasing power. The company’s gross margin saw a decline, and one factor for higher cost was the constant rise in the Paracetamol prices (the main raw material for Panadol) due to closure of a major Chinese supplier as per company’s quarterly report. It further highlighted that Panadol’s profitability will continue to affected as Paracetamol prices currently continue to stand at over 250 percent versus July 2020 levels.
The company’s earnings we also impacted by significant finance cost due to exchange losses. Overall, GSKCH’s profits fell by 78 percent year-on-year in 1HCY22.
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