GSK brushes off China probe to post solid 2013 profits

5th February 2014, Comments 0 comments

GlaxoSmithKline's net profits jumped by a fifth last year as lower taxes offset flat sales, announced on Wednesday the British drugsmaker hit by a bribery probe in China.

Earnings after tax rallied 20.8 percent to £5.436 billion ($8.846 billion, 6.547 billion euros) in 2013, compared with the previous year, GSK said in a results statement.

Turnover advanced one percent to £26.5 billion, but revenue from sales of drugs in China plunged 18 percent, hit by Beijing's probe into bribery allegedly carried out by senior GSK staff.

Excluding China, emerging markets sales grew by five percent. US sales expanded by one percent, while Europe was flat.

"The People's Republic of China, acting through various government agencies, continues its investigation into alleged crimes and violations of law by GSK China's operations," the company said on Wednesday.

"The group takes these allegations seriously and is continuing to cooperate fully with the Chinese authorities in this investigation."

GSK added that it was unable to provide the market with a reliable estimate of any potential financial fallout.

Last July, GSK admitted that senior employees at its China division appeared to have breached Chinese law, after authorities alleged that employees had bribed government officials, pharmaceutical industry groups, hospitals and doctors to promote sales.

Brushing off the probe, GSK chief executive Andrew Witty said the group's annual performance was in line with expectations and forecast that group revenues would grow by around two percent in 2014.

"GSK's trading performance in 2013 was in line with our guidance, despite some unexpected challenges and reflected the improving balance of our sales base," Witty said in the earnings release.

"I was encouraged by the improved performance of our US business. We also saw stabilisation of our European business with the benefits of our restructuring programme helping to offset the ongoing economic and pricing pressures in the region."

© 2014 AFP

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