GlaxoSmithKline Plc has suffered major setback during the third quarter ended September 2013 on account of sharp declined in sales in China on account of ongoing investigation into its business. The company's net profit plunged by 14.3 per cent to £1,010 million from £1,179 million in the corresponding period of last year. Its turnover declined by 0.3 per cent to £6,510 million from £6,527 million as its sales in China declined by 61 per cent.
The pharmaceutical sales declined by one per cent to £4,210 million and that of vaccines improved by 3 per cent to £987 million. The sales in US and Europe improved by 2 per cent and 4 per cent respectively to £2,231 million and £1,871 million. Its sales in emerging markets declined by 6 per cent to £1,590 million. However, its sales in Japan improved by 3 per cent to £420 million. Pharmaceutical & vaccines sales in US and Europe improved to £1,856 million and £1,274 million respectively.
Andrew Witty, CEO, said, “This quarter marks continued delivery for GSK of broadly-based sales growth, significant new product output from the pipeline and further growth in returns to shareholders. In R&D, we received four approvals and importantly, we are making substantive progress to expand our respiratory portfolio. As far as full year 2013 is concerned, we continue to expect core EPS growth of 3-4 per cent on sales growth of around one per cent. With our substantial new product flow and the changes we have made to our commercial model in US, we continue to be optimistic about future growth in this market.”
“We took another major step forward this month in development of the world's first vaccine to prevent malaria with positive 18 month follow-up data generated for the candidate vaccine. As we focus on launching our new pipeline, we continue to make progress on the sale of non-core assets and parts of the business where we can realise attractive value for our shareholders. This quarter we announced agreements for divestitures totalling more than £2 billion. We have agreed to sell Lucozade and Ribena to Suntory for £1.35 billion and have accepted an offer of £700 million from Aspen for our anticogulant products Arixtra and Fraxiparine and their related manufacturing site,” Witty added.
For the nine months ended September 2013, GSK's net profit decline by 19 per cent to £3,123 million from £3,855 million in the similar period of last year. Its turnover also declined marginally by 0.2 per cent to £19,599 million from £19,629 million. Sales of Seretide/Advair improved by 3 per cent to £3,876 million and that of Augmentin improved by 6 per cent to £465 million.