Earnings Report /

Unilever Consumer Care: Strong FY19 earnings as loss from discontinued operations remained minimal

    Auneea Haque
    Auneea Haque

    Research Associate

    IDLC Securities
    25 February 2020
    Published byIDLC Securities

    Glaxosmithkline Bangladesh (GLAXOW BD) declared positive earnings of BDT986mn in FY19 after incurring a loss of BDT636mn the previous year, surpassing our expectations. EPS stood at BDT81.83/share in FY19 vs a loss of BDT52.75/share in FY18. 

    Glaxow BD incurred significant costs in FY18 due to the closure of the pharmaceutical business (costs related to termination payments to employees and shutting down the Chittagong factory). The loss coming from discontinued operations (Pharma unit) stood at BDT2,032mn in FY18, which exceeded the profit coming from continued operations (Consumer unit). In FY19, the loss coming from discontinued operations fell to roughly BDT110mn (estimated), down by c95% yoy. As a result, the profit figure became almost normalised. Furthermore, we think gross margin expansion significantly contributed to the earnings of FY19. 

    GSK declared a BDT 53/share dividend (c65% payout) for 2019. The payout underperformed our expectation of BDT55/share (c73.6% pay-out) and the last six years’ median payout of c77% (excluding FY18). 

    We will provide further updates when the financials become available.