• Sunday, June 23, 2024
businessday logo

BusinessDay

GSK Nigeria profit dips 20% on FX pressures

GSK Nigeria profit dips 20% on FX pressures

GlaxoSmithKline(GSK) Nigeria, manufacturer and distributor of healthcare products saw its profit dip 20 percent in the first quarter of 2023 on the back of FX pressures, BusinessDay analysis shows.

The health firm’s profit dropped to N155.17 million in the first quarter of 2023 from N194.37 million in the first quarter of 2022.

“Foreign exchange unavailability has continued to impact its operations like every other manufacturing company in the country. The challenge in accessing currency is affecting our ability to maintain a consistent supply of medicines and vaccines in the market,” Omongiade Ehighebolo, director of communication and government affairs at GSK Consumer Nigeria Plc said in a statement seen by BusinessDay.

GSK Nigeria realised foreign exchange loss stood at N208,000 in the first quarter of 2023 while no realised foreign exchange loss was recorded in the first quarter of 2022.

“The business environment continues to be very challenging with foreign exchange availability affecting the group’s ability to settle foreign currency-denominated trade payables with product suppliers. As a result, it remains difficult to maintain consistent supply to the market,” GSK Nigeria said in its financial statement.

GSK Nigeria said the worsening shortage of foreign exchange in the country is hurting its ability to maintain a consistent supply of drugs and vaccines to the Nigerian market.

Read also: Firms partner to boost highly skilled workforce in Nigeria

The firm’s revenue dropped to N4.02 billion in the first quarter of 2023, a 45.4 percent decline from N7.36 billion in the first quarter of 2022.

The revenue obtained from sales of consumer healthcare brands contributed the most at N2.51 billion while the sales of pharmaceutical brands contributed the sum of N1.51 billion in the first quarter of 2023.

GSK Nigeria’s cost of sales declined to N2.54 billion in the first quarter of 2023, a 53 percent drop from N5.4 billion in the first quarter of 2022.

The firm saw a decline in operating expenses to N1.31 billion in the first quarter of 2023, a 19 percent increase from N1.62 billion in the first quarter of 2022.

The operating expenses entail selling and distribution at N739.47 million and administrative expenses at N572.89 million in the first quarter of 2023.

GSK Nigeria’s inventories dropped 57 percent to N3.11 billion from N7.26 billion in the reviewed period.

The inventory constituents include consumer healthcare, oral care products (N2.03 billion) and pharmaceutical products(N1.08 billion) in the first quarter of 2023.

Interest income on short-term investments, however, increased by 196 percent to N77.99 million from N26.32 million in the comparable periods.

The firm’s net cash generated by operating activities stood at N2.66 billion in the first quarter of 2023 from N1.48 billion net cash used in operating activities in the first quarter of 2022.

Net cash flows generated by investing activities rose to N177.02 million, 561 percent increase from N26.79 million in the comparable period.

Net cash flows used in financing activities stood at N43.41 million from N1.5 million in the reviewed period.

Cash and cash equivalents stood at N22.78 billion in the period which ended March 2023, a 102 percent increase from N11.29 billion in the same period of 2022.

GSK Nigeria’s basic and diluted earnings per share stood at 13 kobos from 16 kobos in the reviewed period.