GlaxoSmithKline GSK to shutdown in Nigeria

GlaxoSmithKline (GSK) has announced plans to end its prescription medicines and vaccines in Nigeria after 51 years of operation

Announce 18.14% Pre-Tax Profit Growth in Q2 2023

GlaxoSmithKline (GSK) has announced plans to end its prescription medicines and vaccines in Nigeria after 51 years of operation

In a statement sent to the Nigerian Exchange Limited, the multinational pharmaceutical company said it would transition to a third-party direct distribution model for its pharmaceutical products.

At the same time, the company said it is now working with its advisers to agree on the next steps, while it plans to submit a scheme of arrangements to the Securities and Exchange Commission for the possible return of cash to its local shareholders. 

GlaxoSmithKiline was incorporated in Nigeria in June 1971 and commenced business the following year.

The multinational pharmaceutical company, initially known as Beecham at its incorporation, is well-known for products like Panadol, Ribena, Lucozade, Macleans, and Andrews Liver Salt, among other products. 

Furthermore, IdanNews reports that GLK Consumer Nigeria Plc reported its 2023 second-quarter results showing pre-tax profits grew by 18.14% year on year, reaching N274 million.

This took half-year pre-tax profits to N504 million versus N518 million in the same period last year.

Key highlights Q2 2023 vs Q2 2022

  • Revenue N3.732 billion -49.92% YoY 
  • Cost of sales N2.418 billion -57.32% YoY 
  • Gross Profit N1.314 billion -26.43% YoY 
  • Administrative expenses N497 million +9.66% YoY 
  • Selling and Distribution expenses N693 million -36.92% YoY 
  • Operating profit N123 million -47.10% YoY 
  • Finance Income N192 million +943.34% YoY 
  • Profit for the year N185 million +19.08% YoY 
  • Earnings per share 15 kobo +15.38% YoY 
  • Cash and cash equivalent N23.215 billion +16.21%.
  • Total Assets N30.268 billion +3.00%

Insights: Despite the challenging environment evidenced by the drop in revenue, the company succeeded in expanding its profits.

This positive outcome was primarily driven by the decline in operational costs and an increase in finance income.

The growth in revenue was affected by the very demanding situation concerning foreign exchange availability during the period.

This issue significantly impacted on the Group’s capacity to settle trade payables denominated in foreign currencies with its product suppliers. Consequently, maintaining a steady market supply was difficult. 

Nevertheless, the company realized a finance income of N192 million, mainly originating from interest gains on short-term investments, contributing significantly to the enhancement of the bottom-line performance.