Glaxo net disappoints analysts

Glaxo net disappoints analysts
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First Published: Fri, Jul 27 2007. 12 29 AM IST
Updated: Fri, Jul 27 2007. 12 29 AM IST
GlaxoSmithKline Pharmaceuticals Ltd (GSK Pharma), the largest foreign-owned drug maker in India, has reported a net profit of Rs96.43 crore, a year-on-year increase of 6% for the quarter ended 30 June on the back of double-digit growth in its antibiotics, calcium and iron supplements. The net sales, excluding excise duties, this quarter, were down by 3% to Rs395.61 crore.
GSK Pharma said it will sell its fine chemical business, Qualigens Fine Chemicals, to Thermo Electron LLS India Pvt. Ltd, for Rs240 crore. The divestment, expected to close in September, to a unit of US-based Thermo Fisher Scientific Inc. is the second in a year.
The company, in a move to hive off non-core businesses, had sold its animal health business to Virbac Animal Health India Pvt. Ltd for Rs207.1 crore in July 2006.
In the corresponding quarter last year, Mumbai-based GlaxoSmithKline Pharmaceuticals Ltd had net sales of Rs407.34 crore and a net profit of Rs91.06 crore. The results have missed expectations of five analysts polled by Mint who expected net sales of Rs427 crore and net profits of Rs103.5 crore for the quarter that has seen a 6% appreciation of rupee against the dollar. This currency movement was anticipated to benefit the foreign-owned drug makers as they import heavily.
The company, associate of the UK’s GlaxoSmithKline Plc., said in a statement that the results of the just gone-by quarter are not comparable on a year-on-year basis as it had sales from the animal health business in the June quarter last year.
“There is a clear focus on core business of pharmaceuticals, especially vaccines and the company is gearing up to several patented products,” said Rohit V. Bhat, sector analyst with Mumbai-based firm Batlivala & Karani Securities.
Commenting on the sale of Qualigens, Hasit Joshipura, managing director in GSK Pharmaceuticals Ltd said, “For further growth, infusion of new technology and products are necessary. The business has great potential and significant value would be unlocked through its appropriate placement within a global leader in laboratory chemicals and allied products.”
GSK Plc.’s second associate company in the country, GlaxoSmithKline Consumer Healthcare Ltd, on the other hand, posted a robust 37% rise in net profit to Rs42.3 crore for the April-June quarter. The sales for the company—marketers of health drinks such as Horlicks and Boost—increased by 17.9 % to Rs344.4 crore.
GSK Consumer Healthcare will continue to invest aggressively in its flagship brands.
“India is also a high potential market and as announced earlier this year our programme of targeted acquisitions of nutritional brands remains firmly on track,” said Zubair Ahmed, managing director, GlaxoSmithKline Consumer Healthcare.
Shares of GSK Pharma fell by 2.6% to close at Rs1,221.65 on Bombay Stock Exchange and those of GSK Consumers Health dipped by 0.3% to close trading at Rs577.45 per share. The bourse’s benchmark index Sensex gained 0.5 %.
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First Published: Fri, Jul 27 2007. 12 29 AM IST