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(Alliance News) - GlaxoSmithKline PLC on Wednesday held its expectations for 2021 as a whole, in spite of a weaker performance for the first half of the year on lower demand and sales.
Shares in Brentford, England-based pharmaceutical group were marginally higher at 1,399.60 pence on Wednesday in London, retracing after having initially jumped 1.7% on the midday announcement.
For the three months ended June 30, pretax profit fell 44% to GBP1.47 billion from GBP2.64 billion a year ago. This was due to the net profit of GBP2.30 billion booked in the second quarter of 2020 from the sale of the Horlicks and other Consumer brands to Anglo-Dutch consumer goods firm Unilever PLC in April 2020.
As a result, Glaxo recorded an 'other operating' expense of GBP76 million, versus GBP1.61 billion in other operating income a year before.
Operating profit fell 41% to GBP1.68 billion from GBP2.85 billion. This was on revenue that grew 6.2% year-on-year to GBP8.09 billion from GBP7.62 billion, as pandemic adjuvant sales and higher demand for Bexsero in the US and Europe helped boost Vaccines revenue by 39% to GBP1.57 billion.
Revenue from the Pharmaceuticals segment grew 3% to GBP4.23 billion, on a rise in sales for New and Specialty products.
On a constant currency basis, revenue for the second quarter was up 15% year-on-year.
For the six-month period, pretax profit was down 33% at GBP2.99 billion from GBP4.48 billion the same period a year prior. Operating profit dropped 31% to GBP3.37 billion from GBP4.86 billion, also due to the gain from the sale of Horlicks a year prior.
Half-year revenue slipped 7.2% year-on-year to GBP15.51 billion from GBP16.71 billion. Revenue from Pharmaceuticals for the six months dropped 5% to GBP8.11 million, with a fall in HIV sales, and in Established Pharmaceuticals due to competition faced by Xyzal in Japan, and Advair globally.
Vaccine revenue also fell, down 5% at GBP2.80 billion, amid lower demand for routine adult vaccination due to the Covid-19 vaccination programme in the US and Europe taking priority resulted in lower Shingrix sales.
For the second quarter of 2021, Glaxo declared a dividend of 19 pence per share, in line with a year prior. The group continues to target an annual payout of 80p per share, also in line with the year before. However, it said back in June that this will fall to 55p in 2022 from GSK and its demerged Consumer Healthcare business combined.
Looking ahead, Glaxo reconfirmed its guidance for 2021, with a mid-to high single digit constant currency decline in adjusted earnings per share. However Pharmaceutical revenue growth is set to range from flat to low-single digits, and Consumer Healthcare growth between low and mid single digits. Vaccines revenue is set to be flat.
"We expect this positive momentum to continue through the second half of the year driving us towards the better end of our earnings guidance range for 2021, and meaningful performance improvement in 2022. We continue to strengthen our pipeline and are advancing well towards separation. Our clear priority is to focus on execution, unlocking the value of Consumer Healthcare and delivering the step-change in growth and performance we now see for GSK," said Chief Executive Officer Emma Walmsley.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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