Investors warm to CSL growth story despite dip in first half profits
INVESTORS have applauded CSL's upgraded profit forecast after the blood products and vaccines maker sought to immunise itself against the euro zone crisis.
INVESTORS have applauded CSL's upgraded profit forecast after the blood products and vaccines maker sought to immunise itself against the euro zone crisis.CSL upgraded its full-year profit growth forecast to 13 per cent, or about $1 billion, leading to a jump in the company's share price yesterday.CSL's managing director, Brian McNamee, said despite a fall in earnings it would experience significant growth in the next three years, particularly in emerging markets."We are seeing excellent growth in the US and Europe and I wouldn't want to ignore those markets," Mr McNamee told analysts. "Clearly we see opportunities for further growth."CSL unveiled a 3.4 per cent slide in net profit to $483 million for the half year to December 31, from $500.2 million in the previous corresponding period.But Mr McNamee said the company was confident full-year earnings would be stronger. He upgraded the profit growth forecast from 10 to 13 per cent.He said the first half result had been affected by exchange rate fluctuations.After getting its fingers burnt in the Greek debt crisis last year, CSL made an ?11 million ($13.7 million) first-half provision related to accounts in the troubled southern European economies of Greece, Italy, Spain and Portugal.Mr McNamee added the biotech would continue providing its essential medical products to Greece, despite the risk of not getting paid for them.Last August CSL revealed Greece's state-owned hospitals could not afford to pay millions of dollars owed to CSL for the supply of products to treat haemophiliacs and trauma patients, leading it to write off $25 million in its accounts for 2010-11.Sales of its essential products in Europe and the US were positive, as were sales in new markets such as China, Russia, Ukraine and Brazil."Eventually the demand had to come back," he said. "It's not a product anyone takes recreationally."On another front, CSL said it was close to finalising an investigation into why hundreds of Australian children under five had reactions to its seasonal flu vaccine in 2010."We will obviously be updating the regulator and making the results available as soon as possible," a spokeswoman said.The UBS analyst Andrew Goodsall said CSL's upgraded profit guidance helped drive its share price higher and the outlook was positive.CSL shares closed 77? higher at $31.72. It declared an unfranked interim dividend of 36? a share, up 1?.