GlaxoSmithKline Net Profit Up 49%

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Mumbai, April 26: India’s top drug maker by market share, GlaxoSmithKline Pharmaceuticals, said on Friday January-March net profit jumped 49 per cent on the year, beating forecasts, but cautioned that the strong growth might not repeat itself.

The company, owned nearly 49 per cent by Britain’s GlaxoSmithKline Plc, posted a first-quarter net profit, after exceptional expense, of Rs 227.9 million ($4.65 million), compared with Rs 152.8 million a year earlier. Net sales grew 9.2 per cent to Rs 2.84 billion from 2.60 billion. “The figures are far better than expected in both profit and sales. Operating margins are up by an encouraging 4.9 percentage points to 14.1 per cent,” said ABN Amro analyst Giridhar Iyengar.

“Cost savings from manpower and manufacturing rationalisation are paying off.” It had an exceptional expense of Rs 30.2 million on an employee separation scheme and retirement benefits.

A Reuters poll of 18 brokerages earlier this month estimated a net profit of Rs 200 million on sales of 2.6 billion.

The company, formed in October by the merger of Glaxo India and SmithKline Beecham Pharmaceuticals, attributed the performance to three key factors.

“Significant growth in sales and profit has been achieved due to a sharper focus on the profitable pharmaceutical brands, tight control on cost of goods and synergies from integration,” managing director Venkatraman Thyagarajan said in a statement.

“The reduction in staff numbers due to manufacturing rationalisation, coupled with control on field staff and back-office headcount has helped improve profit,” he said. And added that strong profit growth in the first quarter need not necessarily repeat itself.