GSK’s Q1 performance temporarily impacted by GST trade channel destocking whilst fundamentals remain intact
GlaxoSmithKline Pharmaceuticals (GSK) declared its financial results for the quarter ended 30th June 2017. Revenue from Operations for the quarter ended 30th June 2017 at Rs.607 crores recorded a decline of 14 per cent as compared to the same prior year period. This is mainly attributable to a destocking of the trade channel by approximately two weeks. Consequently, the destocking had a significant impact of this quarter’s profit growth as compared to the same prior year period resulting in a Profit Before Tax (PBT) at Rs. 38 crores and Profit After Tax (PAT) at Rs. 26 crores.
Commenting on the results, A. Vaidheesh, Managing Director, GlaxoSmithKline Pharmaceuticals Limited said, “Our Company’s Revenue and PBT performance have been temporarily adversely impacted by the introduction of GST. The pharmaceutical trade channels de-stocked impacting the overall performance of the industry. In line with our expectations, our primary sales reduced by an approximate 130 crores or equivalent to 2 weeks of sales that contributed to a decline of 20 per cent partly offset by an increase in value growth of 6 per cent. We expect the trade channels to normalise in future months. Our prescription uptake in the market remains strong where we maintained patient supply for the GST transition. The IMS TSA (Territorial Sales Analysis) data for the six month period to June 2017 highlights GSK’s fundamentals in prescription fulfilment remain intact growing at 7 per cent in value terms ahead of a market growing at 6 per cent.”