GlaxoSmithKline Consumer Nigeria Plc reported its 2023 second-quarter results showing pre-tax profits grew by 18.14% year on year, reaching N274 million.
This took half-year pre-tax profits to N504 million versus N518 million in the same period last year.
Key highlights Q2 2023 vs Q2 2022
- Revenue N3.732 billion -49.92% YoY
- Cost of sales N2.418 billion -57.32% YoY
- Gross Profit N1.314 billion -26.43% YoY
- Administrative expenses N497 million +9.66% YoY
- Selling and Distribution expenses N693 million -36.92% YoY
- Operating profit N123 million -47.10% YoY
- Finance Income N192 million +943.34% YoY
- Profit for the year N185 million +19.08% YoY
- Earnings per share 15 kobo +15.38% YoY
- Cash and cash equivalent N23.215 billion +16.21%.
- Total Assets N30.268 billion +3.00%
Insights: Despite the challenging environment evidenced by the drop in revenue, the company succeeded in expanding its profits. This positive outcome was primarily driven by the decline in operational costs and an increase in finance income.
- The growth in revenue was affected by the very demanding situation concerning foreign exchange availability during the period. This issue significantly impacted on the Group’s capacity to settle trade payables denominated in foreign currencies with its product suppliers. Consequently, maintaining a steady market supply was difficult.
- Nevertheless, the company realized a finance income of N192 million, mainly originating from interest gains on short-term investments, contributing significantly to the enhancement of the bottom-line performance.
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I am yet to be convinced why Glaxo SmithKline
Consumer Nigeria Plc should withdraw from the Nigerian market. The company has been operating in Nigeria for decades and has made some economic stride in its performance. The issue of Forex has always been part of the problem of the manufacturing companies in Nigeria. The inability of the company to face the strong competition with its pairs may be responsible for its decision to withdraw from Nigeria. What is the position of the shareholders with this decision of withdrawer? Is this withdrawal total or partial? If total, what is the position of the employees and the stakeholders? Will the company be willing to transfer it assets and liabilities to a willing buyer/partner? These are relevant questions to ask the management and directors of the company. I have my belief that Glaxo Smith can still remain a viable company in Nigeria if only the company will be willing to reorganize its operation in Nigeria. The new government in Nigeria should be given the opportunity to put things right for the economy. A closer look at President Tinubu’s strategies and long-term plan should be encouraged and not to be distracted. I pray for a change of mind of the management of the company.
I agree. As at today November 2023, do we know if the withdrawal is still being pursued, or there has been a change in direction?