Glaxo, Burroughs profits rise in H1

MUMBAI, July 27: Glaxo India and Burroughs Wellcome India have registered healthy increases of 47.27 per cent and 57.6 per cent respectiv...

MUMBAI, July 27: Glaxo India and Burroughs Wellcome India have registered healthy increases of 47.27 per cent and 57.6 per cent respectively in net profits for the six months ended June 30, 1998 as compared to the corresponding period of the previous year. Glaxo’s net profits rose to Rs 26.48 crore from Rs 17.98 crore in the previous year, while that of sister concern Burroughs Wellcome increased to Rs 9.52 crore compared to Rs 6.04 crore.

Net sales of Glaxo jumped 9.99 per cent to touch Rs 365 crore, while Burroughs Wellcome sales rose 10.29 per cent to Rs 90.43 crore. Other income of both companies moved up to Rs 16.44 crore (in the case of Glaxo) and Rs 3.56 crore in the case of Burroughs Wellcome.

Analysts said that Glaxo’s performance was commendable given that it was achieved despite the steep cut in prices of anti-ulcer bulk drug, ranitidine. However, the company’s true potential would be realised if well-known brands like Zinetac, Celin, Cobadex etc are decontrolled, they said. Glaxo’s salesgrowth, analysts added, had been steered by its strong export performance. Net profit margins rose to 7.25 per cent from 5.41 per cent. Glaxo said that it acquired a 100 per cent equity stake in the Biddle Sawyer Group of companies in January 1998. During the half year ended June 30, 1998, these compaies operated as separate legal entities and hence the results of those companies do not feature in its results. The net sales and profit before taxation from the operations of the Biddle Sawyer group for the half year ended June 30, 1998 are Rs 18.9 crore and Rs 4.4 crore respectively.

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Significantly, Burroughs Wellcome’s robust performance comes even as it faced steep price reductions in the case of key brand Septran. Indications are that sales of Septran, Calpol etc rose even as the company reaped in the benefits of decontrol in certain products like Actifed.

Operating profits rose by 76 per cent to Rs 15.21 crore and Burroughs Wellcome’s strong showing has fuelled expectations of a bonus issue at the closeof the year.

Total expenditure for Glaxo stood at Rs 329.90 crore while interest was Rs 4.74 crore while the corresponding figures for Burroughs Wellcome were Rs 75.22 crore and Rs 1.05 crore respectively. Burroughs Wellcome also incurred payment of Rs 1.74 crore under voluntary retirement schemes for the half year ended June 30, 1998.

Depreciation and provision for taxation for Glaxo was Rs 6.60 crore and Rs 13.65 crore respectively, while in the case of Burroughs Wellcome these figures were Rs 1.33 crore and Rs 5.13 crore.