Business & Economy News

GSK Nigeria’ Earnings Plunge as Sales Hit 7-year Low

The revenue of GlaxoSmithKline (GSK) Consumer Nigeria Plc, a pharmaceutical industry company, fell to the lowest level in seven years in 2023, data compiled from BusinessDay shows.

Five months ago, the multinational announced plans to exit the country after operating for 51 years.

The company’s latest unaudited financial statement shows that revenue declined to N16.4 billion last year from N25.4 billion in 2022. Profit also dropped to N510.8 million from N771.1 million.

Revenue from the sale of consumer healthcare brands contributed N13.4 billion to the total revenue while sales of pharmaceutical brands amounted to N3.05 billion.

Further findings from the financials revealed that the sale of consumer healthcare brands increased to N13.4 billion from N8.6 billion while sales of pharmaceutical brands dropped to N3.05 billion from N16.8 billion.

GSK’s cost of sales declined to N10.3 billion from N18.5 billion. Operating expenses rose to N6.3 billion from N6 billion.

Selling and distribution costs dipped to N2.7 billion from N3.5 billion. Administrative expenses were N3.6 billion, up from N2.8 billion.

Finance income rose to N448.7 million from N319.5 million. Impairment loss on financial assets rose to N102.2 million from N5.9 million.

Total assets rose to N31.7 billion from N29.4 billion. Total liabilities increased to N30.2 billion from N19.9 billion.

Net cash generated by operating activities dropped to N5.9 billion from N7.1 billion. Net cash flows generated by investing activities increased to N717.3 million from N453.6 million.

Net cash flows used in financing activities stood at a negative of N376.1 million compared to a negative of N333.8 million. Cash and cash equivalents increased to N26.5 billion from N20 billion.

Basic earnings per share dropped to 43 kobo from 64 kobo during the reviewed period.

Over the past two years, pharmaceutical companies in Africa’s biggest economy have been dealing with the high cost of sourcing foreign change for their raw materials.

The FX reform in June intensified their challenges making the pharmaceutical industry struggle to keep essential drugs affordable for the public.

Data from the International Trade Centre, a multilateral agency, show that the importation of pharmaceutical products into Nigeria dropped for the second straight time to $1.05 billion in 2022 from $1.37 billion in 2021.

A BusinessDay survey of some drugs produced by GSK shows that the price of a Ventolin inhaler, used to treat asthma symptoms, ranged from N6,000 to N10,000, up from N1,200-N1,500 in January last year, while that of a 625g Augmentin – used for treating bacterial infections – has risen to N20,000-N25,000 from N5,000-N6,000.

The price of Seretide, a brand of medical inhalation powder, has skyrocketed from N5,000 in April to an average of N55,000 in November.

Last month, the Nigerian Exchange Limited suspended trading on the shares of the company for eventual delisting from the Exchange.


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