LONDON: GlaxoSmithKline’s net profits almost halved last year, hit partly by a large Chinese fine following a bribery probe, the British drug manufacturer said on Wednesday (Feb 4).
Profit after tax dived to £2.76 billion (US$4.20 billion) in 2014, compared with £5.436 billion (US$8.26 billion) a year earlier, GSK said in a results statement.
The 2013 performance was however skewed by the £1.3-billion (US$2-billion) sale of drinks brands Lucozade and Ribena to Japan’s Suntory Holdings. GSK added that revenues declined three percent to £23 billion (US$35 billion) last year, hurt by “challenging” trade in the United States.
Legal costs more than doubled to £548 million (US$833 million) in 2014, after Chinese authorities fined GSK 3.0 billion yuan (US$480 million) last September after a nearly year-long bribery probe. “Legal charges of £548 million included a £301 million (US$458 million) fine paid to the Chinese government,” GSK said on Wednesday.
The group also took a £750 million (US$1.14 billion) restructuring charge last year, up from £517 million (US$786 million) in 2013.
GSK is seeking to move on from a damaging scandal, which resulted in a Chinese court fining the company over alleged bribery. The firm’s former head of China operations, Mark Reilly, and four other ex-officials were given suspended sentences of between two and four years in prison.