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McNamee leaving CSL with healthy bottom line

14 Feb 2013 THE AGE - GEORGIA WILKINS


AUSTRALIA'S largest pharmaceutical company, CSL, has posted a record first-half profit, leaving one of the country's longest-serving chief executives to step down after riding two decades of growth.

Brian McNamee will exit the group in July after 23 years as chief executive, handing the reins to Paul Perreault, the head of the company's flagship subsidiary.

Dr McNamee leaves CSL with a net profit of $US627 million ($A611.58 million) for the six months to the end of December. This is up 25 per cent from the previous corresponding period after stripping out the impact of the exchange rate.

Even so, the result is largely in line with expectations, boosted by cost savings and a growing presence in emerging markets. Given CSL generates most of its profit from offshore, it has shifted to reporting in US dollars.

Dr McNamee, who flagged his retirement late last August, said the company was on track to lift profits by 20 per cent for the full year, despite recording no growth in Japan and economic conditions remaining soft in parts of southern Europe.

"Although global business conditions remain mixed, we are able to reaffirm our upgraded profit outlook," he said. "It's been a very productive half-year during which we have successfully strengthened our presence in emerging markets."

CSL shares closed steady at $57.21, although they had rallied more than 3 per cent during the session. The company increased its interim dividend to US50¢ a share.

CSL's No. 1 product is used to replace antibody cells in people with low immunity. Sales of the product, Immunoglobulin, rose 10 per cent to $US912 million. The company also makes blood transfusion products to help sufferers of haemophilia. Sales of this product rose 6 per cent to $US542 million.

Mr Perreault said the company's healthcare product sales were helped by a growing number of patients able to afford blood treatments in developing countries.

"As emerging markets continue to industrialise and treatments and care become available, the first thing they worry about is clean water and from there it starts moving up," he said.

Speaking on a domestic front, Dr McNamee said the company was anticipating a rise in royalties for its Gardasil vaccine, and flagged it was waiting on a government decision over the introduction of a new shingles vaccination.

"We are hoping for good news," he added.

The company said it will try to raise about $US300 million through a new US private placement during the second half of the financial year. The funds would be used to pay off existing debt, Dr McNamee said.

"It's really just a question of managing our debt profile."

Dr McNamee took control of the company in 1990 when it was still a government-owned entity.

UBS healthcare analyst Andrew Goodsall said the results were robust and within expectations.