Karachi, April 3, 2024 – GlaxoSmithKline (GSK) Pakistan’s Chairperson, Lai Kuen Goh, has disclosed a significant decline in the company’s gross margin by 10 percent, attributing it to the prevailing economic conditions in the country.
In a comprehensive review of the financial report released on Wednesday, Lai Kuen Goh highlighted Pakistan’s grappling with a challenging economic environment throughout 2023. The primary drivers behind this economic strain were the substantial devaluation of the Pakistani Rupee (PKR) in previous years coupled with escalating inflation rates.
In response to these economic pressures, the Pakistani government enforced stringent monetary and fiscal policies aimed at stabilization. However, these measures led to higher taxation and interest rates, which proved to be counterproductive for businesses, particularly in the pharmaceutical sector, where absorbing such costs was inherently challenging.
GSK Pakistan, amidst these economic headwinds, managed to achieve a commendable double-digit topline growth of 19 percent in 2023. This feat was accomplished through robust execution strategies and sustained momentum behind key product brands. However, despite the company’s efforts, the gross margin witnessed a significant decline of 10 percent compared to the previous year, as noted by the chairperson.
To mitigate the impact of rising costs, GSK Pakistan pursued a one-off inflationary price adjustment on essential and non-essential products following extensive advocacy efforts within the industry. Nevertheless, these measures fell short of fully offsetting the cost pressures faced by the company.
Despite the challenging economic landscape, GSK Pakistan demonstrated prudent resource allocation throughout the year, resulting in a marginal increase of only one percent in operating expenditure as a percentage of sales, despite the prevailing high inflation rates.
Lai Kuen Goh emphasized the resilience of GSK Pakistan’s team in navigating the company through such challenging times while maintaining a steadfast focus on delivering performance and upholding the company’s purpose.
Expressing commitment towards fostering a conducive work environment, the chairperson reiterated GSK’s dedication to creating an organizational culture where employees can thrive. This entails a focus on continuous improvement, setting clear objectives, and fostering accountability for results while providing necessary support and empowerment to facilitate success.
Despite facing significant economic challenges, GSK Pakistan remains steadfast in its commitment to delivering value to its stakeholders while navigating through turbulent times with resilience and determination.
