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Power brands nurture GlaxoSmithKline net 42%

07-February-2004
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Power brands nurture GlaxoSmithKline net 42%

The strategy to prioritise 30-odd power brands combined with improved operational efficiencies to give GlaxoSmithKline Pharmaceuticals Ltd (GSKPL) a 42 per cent growth in net profit, at Rs 182 crore, for the year ended 2003.

Meanwhile, for the fourth quarter ended December 31, 2003, GSKPL clocked a net profit after tax but before exceptional items of Rs 36.56 crore. This compares to Rs 21.66 crore for the period under review in the previous year. Net profit after tax stood at Rs 14.64 crore compared with a loss of Rs 3.47 crore previously. The company clocked net sales of Rs 246.58 crore (Rs 228.99 crore).

GSKPL ended the year with a net profit of Rs 182 crore, compared with Rs 128 crore in the previous year. Sales for the 12-month period stood at Rs 1,192 crore (Rs 1,148 crore). The company also recommended a dividend of Rs 10 per equity share for the year.

While total sales registered a growth of 3.8 per cent, pharmaceuticals grew by 5.8 per cent over last year. The pharmaceuticals business segment, at Rs 971 crore, constitutes about 81 per cent of total sales.

Exports, however, dipped by 43 per cent in comparison to the previous year, a fallout of GSK's decision not to export Ranatidine to its parent company. Ranatidine saw a downward revision of prices following a notification from the National Pharmaceutical Pricing Authority (NPPA). "This affected the margins of Zinetac, and the company will feel the full impact of this reduction in 2004," said GSK top-brass.

Mr Kal Sundaram, Managing Director, GSKPL, told mediapersons that the company's star performers, such as Augmentin, and the new generation vaccines demonstrated double-digit growth. Elaborating on other initiatives on the anvil for the year, he said, the company would undertake clinical trials for one pharma product and three vaccines.

On the rationalisation of manufacturing facilities, he said they were still negotiating with buyers for their property at Worli, Mumbai. Meanwhile, with cash generation from operations being favourable, he said the company could look at acquiring attractive brands strategic to its business, look at buying back shares in the market and explore paying an extra dividend to shareholders.

Meanwhile, Burroughs Wellcome (India) Ltd (BWIL), a company that has been globally merged with GSK, recorded a net loss after tax of Rs 4.83 crore in the fourth quarter, down from last year's Rs 7.61 crore. Net sales stood at Rs 31.71, down from last year's Rs 32.85 crore. The year ended with a net loss of Rs 5.81 crore, compared with Rs 35.11 crore. Sales stood at Rs 198.67 crore for the year 2003, compared with Rs 180 crore in the previous year.

The merger of BWIL in India was under evaluation, he said. Meanwhile, the company's Mulund plant has been shut from August 2003 and a Voluntary Retirement Scheme offered to its employees. All workmen had been separated since September 1, he said. A combination of these factors had impacted BWIL's performance last year.

Meanwhile, directors of the company recommended a dividend payment of Rs 15 per equity share for the year.

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