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GSK’s profit dips on FX pressures, rising OPEX

GSK’s profit dips on FX pressures, rising OPEX

GlaxoSmithKline (GSK) Consumer Nigeria has recorded a 7 percent decline in profit after tax, a development that can be attributable to foreign exchange (FX) pressures and rising operating expenses (OPEX).

The firm’s profit after tax dropped to N448.09 million in 9M’2023 from N483.54 million in the same period of 2022.

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

Unrealised foreign exchange losses increased to N11.29 billion in 9M’2023 from N11.26 million in the same period of 2022. However, realised foreign exchange gains amounted to N945.05 million from no realised foreign exchange gains in the same period of the previous year.

GSK’s operating expenses surged to N5.03 billion in 9M’2023 from N4.45 billion in the similar period of 2022.

Revenue dropped to N10.89 billion from N20.43 billion while cost of sales also dropped to N7.42 billion from N15.25 billion.

Revenue obtained from the sale of consumer healthcare brands contributed the most of N7.99 billion while sales of pharmaceutical brands amounted to N2.9 billion in 9M’2023.

Selling and distribution costs dipped to N2.36 billion in 9M’2023 from N2.84 billion in the same period of 2022.

Read also: GSK, Oando, Chams, others drive market higher by 0.40%

On the flip side, GSK’s administrative expenses increased to N2.67 billion in 9M’2023 from N1.6 billion in the similar period of 2022.

Finance income increased to N394.44 million in 9M’2023 from N124.98 million in the same period of 2022.

Impairment loss on financial assets increased to N95.4 million in 9M’2023 from N29.31 million in the same period of 2022.

Tax paid during the period amounted to N274.27 million in 9M’2023 from N232.82 million in the similar period of 2022.

GSK spent N85.85 million on electricity, fuel, and utility in 9M’2023 from N78.83 million in the same period of 2022.

Depreciation by property, plant, and equipment dipped to 60.1 million in 9M’2023 from N65.91 million in the same period of 2022 while depreciation by investment property increased to N8.65 million from N3.49 million.

Read also: GSK’s industrial exodus: Effects, lessons and solutions

Total assets increased to N29.37 billion from N28.69 billion while total liabilities stood at N20.04 billion from N19.44 billion.

Total equity stood at N9.32 billion as of September 30, 2023, from N9.24 billion in the similar period of 2022.

Net cash generated by operating activities rose to N3.77 billion in 9M’2023 from N5.47 billion in 9M’2022.

Net cash flows generated by investing activities surged to N649.27 million from N228.53 million during the comparable period.

Net cash flows used in financing activities stood at a negative of N376.11 million in 9M’2023 from a negative of N244.82 million in the same period of 2022.

Cash and cash equivalents increased to N24.17 billion in 9M’2023 from N18.2 billion in the similar period of 2022.

Basic earnings per share dropped to N37 per share in 9M’2023 from N40 per share in 9M’2022.