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GlaxoSmithKline Q2 Profit More Than Doubles

GlaxoSmithKline plc (GSK.L,GSK) reported a second-quarter profit that more than doubled, reflecting net profit on disposal of Horlicks and other Consumer Healthcare brands as well as increased income from asset disposals.

The profit was partly offset by higher re-measurement charges on the contingent onsideration liabilities and lower operating performance as a result of COVID-19 impact on the Vaccines business and destocking in Pharmaceuticals and Consumer Healthcare following a strong operating performance in the first-quarter of 2020.

The company still expects full-year 2020 adjusted earnings per share decline in the range of 1% to 4% at CER.

While it maintained its 2020 adjusted earnings per share guidance, there remain notable risks to business performance over the balance of the year, the company said.

The company reported that its profit attributable to shareholders for the second-quarter was 2.26 billion pounds or 45.5 pence per share compared to 964 million pounds or 19.5 pence per share in the prior year.

Adjusted earnings per was 19.2 pence, down 37% AER, 38% CER. The reduction primarily resulted from lower sales and a higher non-controlling interest allocation of Consumer Healthcare profits and a higher effective tax rate.

Profit before taxation for the second-quarter was 2.64 billion pounds up from 1.26 billion pounds in the previous year.

Group turnover was 7.62 billion pounds in the quarter, down 2% AER, 3% CER and 10% CER on a pro-forma basis.

On a pro-forma basis, Group turnover was down 10% CER, and down 8% CER excluding the impact of divestments in Vaccines and brands divested or under review in Consumer Healthcare. Sales decline reflected expected disruption from COVID-19, particularly in Vaccines as well as destocking from the first-quarter 2020 in Pharmaceuticals and Consumer Healthcare.

Vaccines turnover declined 29% AER, 29% CER to 1.13 billion pounds, primarily driven by the adverse impact of the COVID-19 pandemic on DTPa-containing, Hepatitis, Shingles and Meningitis vaccines, together with the Rabipur and Encepur divestment.

Consumer Healthcare sales grew 25% AER, 25% CER to 2.39 billion pounds in the quarter, largely driven by the inclusion of the Pfizer portfolio. On a pro-forma basis, sales declined 6% CER, and were flat at CER excluding brands divested/under review, including reversal of stockbuilding in the first-quarter of 2020.

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