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?.
Frequently Asked Questions about this Article…
What were CSL’s first‑half results and how did net profit change?
CSL reported a 3.4% slide in net profit for the half year to December 31, with net profit falling to $483 million from $500.2 million in the previous corresponding period.
Why did CSL upgrade its full‑year profit growth forecast and what is the new guidance?
CSL upgraded its full‑year profit growth forecast from 10% to 13% (about $1 billion). Management cited confidence that full‑year earnings would be stronger and pointed to expected significant growth over the next three years, including opportunities in emerging markets.
How did currency swings and the euro‑zone crisis affect CSL’s results?
CSL said exchange‑rate fluctuations hurt its first‑half result. The company also took a provision of €11 million (about $13.7 million) related to accounts in troubled southern European economies after exposure during the Greek debt crisis.
What actions did CSL take in response to unpaid accounts in Greece and other southern European countries?
CSL made a first‑half provision for about €11 million tied to accounts in Greece, Italy, Spain and Portugal, and previously wrote off $25 million in 2010–11 after Greece’s state hospitals couldn’t pay. Despite the payment risk, CSL said it would continue supplying essential medical products to Greece.
How are CSL’s sales performing in the US, Europe and emerging markets?
The article reports positive sales of CSL’s essential products in Europe and the US, with growing sales in new and emerging markets such as China, Russia, Ukraine and Brazil.
What is the status of the investigation into reactions to CSL’s seasonal flu vaccine in children?
CSL said it was close to finalising an investigation into why hundreds of Australian children under five had reactions to its 2010 seasonal flu vaccine and that it would update the regulator and make the results available once possible.
How did investors react to CSL’s upgraded guidance and what happened to the share price?
Investors welcomed the upgraded profit guidance; UBS analyst Andrew Goodsall said the upgrade helped drive the share price higher. CSL shares closed up 7.7% at $31.72 following the announcement.
Did CSL declare a dividend with the interim result?
Yes — CSL declared an unfranked interim dividend of 36 cents a share, which was an increase of 1 cent from the prior comparable payment.
Call 1300 880 160
Start a chat
Schedule a call
