Volatile exchange rates have bitten hearing implant maker, Cochlear Ltd’s prospective bottom line in 2009.
The company’s shares fell 4.4%, or around $2.23 yesterday on the news of the profit downgrade, finishing at $52.65.
That was in a market up 3.5%.
The company said yesterday it now expects net profit after tax in fiscal 2009 to grow 13% to $130.5 million, while core earnings were expected to rise 12% to $137.7 million.
In its February interim announcement, Cochlear said it expected core earnings (which is net profit excluding research and development costs), to grow between 15% and 20% for the full year.
Cochlear, which generates more than 90% of its sales in overseas currencies, reported net interim profit of $69.9 million which was up 22% from the previous corresponding half.
Cochlear said yesterday that it had lost $17 million on foreign exchange contracts in fiscal 2009, compared with a $21.3 million profit in 2008.
The average AUD/USD exchange rate was 76c in fiscal 2009, after 90 cents in fiscal 2008.
"Volatility of foreign exchange rates was experienced throughout the year," Cochlear said.
The company’s full year results will be released on Tuesday, August 11.
The company said that total revenue for the 2009 year (after the foreign exchange contracts) would grow 15% to $695 million.
"Cochlear implant unit sales of 18,461 was up 2%.
There were no donation sales to China in F09 (F08 700 units). The company is supposed to be selling a total of 15,000 units to China over a number of years.
No reason was given for the lack of sales.
Cochlear is introducing new products, including the Nucleus 5 implant system. In an update on the release of this and a number of other new products Cochlear said:
The Cochlear Baha BP100 is a new sound processor for those with a Baha implant.
The Cochlear Baha BP100 has regulatory approval for sale in Europe (CE Mark) and the USA (510(K) submission has been cleared by FDA).
The BP100 is currently being launched in Europe and the USA, with the roll-out, including training, spread across H1 F10.
Clinical validation results of the BP100 were reported at several major medical conferences held in June 2009.
Cochlear Nucleus 5 is the next generation cochlear implant system. It consists of the next generation implant and next generation external processor.
Both the implant and external processor are compatible with the current Nucleus Freedom cochlear implant system, so the implant and the external processor can be released independently.
Cochlear Nucleus 5 has received CE mark approval for sale in Europe.
Timing of registration for reimbursement purposes (if needed) is country specific.
Roll out activities in Europe will occur across H1 F10 and in some European countries not until H2 F10. The implant has already been released in the UK, the company said in the statement.
"Regulatory (FDA) approval in the USA is via approval of PMA supplements (as the implant and externals are separate submissions).
"USA regulatory approval has not yet been received for the implant or external processor submissions.
"In other countries such as Australia availability is governed by regulatory and other approvals which are not expected in F10.
"Clinical data on user acceptance testing of the Cochlear Nucleus 5 externals have been presented at several major medical conferences in June 2009."
Cochlear said more than 100 patients have participated in these tests. Results on product clinical validation of the new implant have also been presented at these conferences.
