The company had booked one-time expenses of Rs1.92 crore during the previous year quarter. Adjusted for this amount, net profits have declined 13.59 per cent during the quarter.

Operating profits or EBITDA, after excluding other income, has declined 21.86 per cent over the pervious year quarter. Operating margins as a percentage of net sales revenues declined considerably to 28.82 per cent from 32.31 per cent for the previous year quarter.

Material consumption declined 18.73 per cent during the quarter. Staff costs went up 4.99 per cent while other operating expenses increased 12.66 per cent. Depreciation charges were marginally higher by 3.45 per cent.

The decline in bottom line was arrested to some extent by a 37.7 per cent rise in net interest income and 34.69 per cent increase in other income.

Pharmaceutical division of Glaxo reported a decline of 14.06 per cent in sales revenues while revenues from veterinary products, feed supplements, fine chemicals, diagnostics, laboratory equipment and exports increased modestly by 7.82 per cent over the previous year quarter.

The company attributed the decline in sales to a high base effect for the previous year quarter. Sales during the first quarter of previous year was affected due to the uncertainties surrounding the implementation of VAT but the second quarter of last year saw a substantial jump in sales after VAT was accepted by stockists and retailers.

Sales revenues for the first half of the current financial year (January-June 2006) have increased 12.45 per cent over the same period of last year. Net profits have gone up by 27.88 per cent over the same period.

The company is in the process of selling its animal healthcare business to European company Virbac for a consideration of Rs20.71 crore. The board and shareholders have approved the proposal and the sale is in the process of being completed.