GSK Pharma Q2 PAT drops 85% to Rs 76 crore

Glaxosmithkline Pharmaceuticals reported 84.8% fall in consolidated net profit to Rs 76.47 crore on a 0.3% decline in net sales to Rs 879.32 crore in Q2 FY21 over Q2 FY20.

The company incurred an exception expenditure of Rs 64.13 crore during the quarter, which mainly comprised of the impact following the decision to initiate a global voluntary recall (pharmacy/retail level) of ranitidine products including Zinetac in India by the ultimate holding company.

"A comprehensive strategic review of the impact of this recall was undertaken by the company on all related assets in India including its manufacturing site at Vemgal. After considering all the strategic options available. The company during the quarter has decided to proceed with the sale of the site and has classified the assets as held for sale. Consequently, the company has recognized financial impact of Rs 64.13 crore to reflect the estimated realizable value of the assets, associated costs and impacts of reversal of provision on account of Zinetac recall, GSK Pharma said in its notes to accounts.

Profit before tax in Q2 September 2020 stood at Rs 126.93 crore, down by 78.4% from Rs 587.41 crore in Q2 September 2019. Current tax expense declined by 27% year-on-year (YoY) to Rs 47.61 crore during the quarter.

Commenting on the results, SridharVenkatesh, managing director, GlaxoSmithKline Pharmaceuticals, said: "GSK continues to demonstrate resilience in these times. This has been reflected in our results for the quarter, wherein sales have grown double digit since Q1 FY21 bouncing back to prior year levels. Most of GSK's key brands have outpaced their respective categories by gaining market share and our cost reduction/efficiency initiatives have helped drive margin expansion.

We also continued our focus as an innovation-driven, science-led biopharmaceutical company with the recent launch of Fluarix Tetra - the world's first inactivated Quadrivalent Influenza Vaccine during the quarter.

After considering all the strategic options available with the company for its manufacturing site at Vemgal following the global voluntary recall of Zinetac, the company has decided to proceed with the sale of the site and has classified the assets as held for sale."

GSK Pharma is a subsidiary of GlaxoSmithKline plc, one of the world's leading research-based pharmaceutical and healthcare companies.

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