Shares in CSL Ltd, the country’s major pharmaceutical group, rose strong yesterday after a bullish outlook from the company and CEO Brian McNamee.
The company reported a solid rise in earnings that was impacted by the stronger Aussie dollar and boosted dividend 17%.
All the doubts about the impact on earning from the dollar and a continuing class action in the US, were shrugged off.
Mr McNamee expects CSL to earn between $1.116 billion and $1.26 billion (based on 2008-09 exchange rates) in 2009-10, with the final figure around the upper end.
Earnings came to $617 million after tax for the six months to December 31, up 23% against the first-half performance in 2008-09.
This included a $46 million cut from the stronger dollar. Adding this back in and earnings were up 32%.
Sales revenue rose 2.1% to $2.41 billion.
The market liked the upbeat confident outlook and commentary.
CSL shares jumped by more than 5% to $33.90, a rise of $1.65 on the day.
Dr McNamee said the outlook "represents 14 to 24 per cent growth on the underlying operational profit."
"Furthermore, we now anticipate the result to be towards the upper end of this range."
Using current exchange rates, its 2009/10 net profit is expected to be between $970 million and $1.07 billion.
"Demand growth for plasma derived therapies is expected to continue," Dr McNamee said.
"CSL is well positioned with a broad portfolio of plasma derived proteins and an increasing demand for Vivaglobin (subcutaneous delivery of liquid immunoglobulin) is expected."
He said the group’s full year guidance was subject to a number of key variables.
These include material price and volume movements on core plasma products, competition, changes in healthcare regulations and reimbursement policies, and royalties arising from the sale of Human Papillomavirus vaccine.
CSL declared an interim dividend of 35 cents, up from 30 cents in the previous corresponding period.
CSL said the share buyback covering up to 54,863,000 shares (9% of CSL’s current shares) had repurchased 46,952,545 shares for approximately $1,497 million, representing 85.6% of the intended maximum number of shares to be repurchased.
CSL’s said that despite this spending, its balance sheet remains "very sound."
" Cash and cash equivalents totalled $956 million as at 31 December 2009, with interest bearing liabilities totalling $459 million."
CSL said its operating results for the period reflected continuing demand for plasma therapies with CSL Behring’s total sales of $1.8b growing 10% on a constant currency basis.
“Sales contribution from across the product portfolio has underpinned this growth.
"Sales of immunoglobulins grew 9% in constant currency terms, largely driven by product demand growth together with a shift in product mix. Immunoglobulin pricing has generally remained stable.
"The Critical Care segment grew 8% in constant currency terms underpinned by volume growth of albumin, particularly in the US and emerging markets. Specialty products, primarily also made a significant contribution.
"Haemophilia sales grew 10% in constant currency terms, mainly driven by product demand growth.
“Pricing has been steady, albeit the total average price was affected by growth in lower priced emerging and tender markets.
"SL Biotherapies sales grew by 31% to $528m. Sales of Novel A (H1N1) Influenza (Swine Flu) Vaccine contributed $160m to sales.
“This was partially offset by the decline in GARDASIL® sales to $18m for the first half of the financial year, down $66m when compared to the prior comparable period.
“This decline is consistent with immunisation ‘catch-up’ programs in Australia drawing to a close.
"Seasonal influenza vaccine sales totalled $91m for the period, up 22% compared to the prior comparable period, arising from growth in the US and German markets.
“Strong contributions from liquid immunoglobulin in Australia and albumin in China also contributed to growth."
