GSK Q3 Profit From Cont. Opns Down; Lifts 2022 Sales Growth Outlook

GSK plc (GSK.L) reported that its third quarter profit attributable to shareholders from continuing operations decreased to 759 million pounds or 18.6 pence per share from the prior year's 877 million pounds or 21.6 pence per share, reflecting increased charges for re-measurement of contingent consideration liabilities and a fair value loss on the retained stake in Haleon.

But profit attributable to shareholders for the third quarter climbed to 10.32 billion pounds or 252.3 pence per share from the previous year's 1.17 billion pounds or 28.8 pence per share reflecting profit after taxation for discontinued operations recognized on the Consumer Healthcare business demerger.

Adjusted earnings per share was 46.9 pence compared to 37.4 pence in the prior year, up 25% at actual exchange rates, 11% at constant exchange rate.

Total operating profit for the third quarter declined to 1.19 billion pounds from last year's 1.38 billion pounds, reflecting the higher remeasurement charges for contingent consideration liabilities and the fair value loss on the retained stake in Haleon, partly offset by increased profits on turnover growth of 9% at CER.

Turnover for the third quarter grew to 7.83 billion pounds from 6.63 billion pounds in the prior year.

GSK separated its Consumer Healthcare business from the GSK Group to form an independent listed company, Haleon in July 2022. The separation was effected by way of a demerger of 80.1% of GSK's 68% holding in the Consumer ealthcare business to GSK shareholders.

Looking ahead for the fourth quarter, the company anticipates continued strong sales growth and a relatively higher rate of R&D spending, reflecting the dynamics of prior year comparisons, in-year phasing, and continued targeted commercial investment.

At constant exchange rate or CER, GSK now expects 2022 sales to increase between 8 to 10 percent and adjusted operating profit to increase between 15 to 17 per cent, excluding any contributions from COVID-19 solutions. Adjusted Earnings per share is expected to grow around 1 per cent lower than operating profit. Previously, the company expected 2022 sales growth of between 6% to 8%, annual adjusted operating profit growth of 13% to 15%. Adjusted earnings per share was expected to grow by around 1% lower than operating profit.

Vaccines sales, excluding COVID-19 solutions, are expected to grow mid to high-teens percentage at CER for the full year.

The company anticipates that sales of COVID-19 solutions will be substantially lower going forward. Sales of COVID-19 solutions for 2022 are at a reduced profit contribution compared with 2021 due to the increased proportion of lower-margin Xevudy sales. It anticipates this to reduce adjusted operating profit growth (including COVID-19 solutions in both years) by around 4%.

The company has declared a third dividend for 2022 of 13.75 pence per share retrospectively adjusted for the Share Consolidation.

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