Smithkline Beecham Q3 Net Dips 12.7% To Rs 12.25 Cr

The net profit of Bangalore-based SmithKline Beecham Pharmaceuticals has fallen 12.7 per cent in the third quarter of 1998 to Rs 12.25 crore from Rs 14.03 crore in the corresponding period last year.

The company has blamed poor sales performance and government-mandated price reductions as the main reasons for the drop in the net profit.

Sales were down 5.4 per cent to Rs 71.20 crore from Rs 75.27 crore.

Total income including net sales, services and other income was down 4.4 per cent to Rs 72.95 crore from Rs 76.33 crore. Total expenditure is Rs 53.58 crore against Rs 57.17 crore a drop of 6 per cent. Competitive pressures on key products, flooding in parts of the country, distribution difficulties and disruption in Maharashtra due to octroi negotiations are also reasons enumerated by management.

The company has admitted that cost pressures mainly from the devaluation of the rupee and inflationary pressures continue to depress profits.

Profit before interest, depreciation and taxation was at Rs 19.36 crore up from Rs 19.16 crore. Interest costs dipped by 71 per cent to Rs 3.53 lakh from Rs 12.25 lakh.

Gross profit were up to Rs 19.33 crore from Rs 19.03 crore, a rise of 1.5 per cent.

The nine-month figures show a marginal decline in net profits to Rs 26.86 crore from Rs 27.12 crore in the corresponding months last year. Sales improved to Rs 225.73 crore from Rs 198.47 crore. In the first half of the current fiscal the company had posted a 11.6 per cent jump in net profit and a 25 per cent hike in sales.

This was largely achieved through improved sales of its key brands Iodex, Engerix B, and Hepatitis B vaccine. The company had also just launched Havrix, a hepatitis A vaccine.