Hearing implant maker Cochlear has made an uncertain start to the 2020-21 financial year with first-quarter revenue down 6% because of the continuing impact of COVID-19.
In a trading update released before yesterday’s AGM that while there was modest growth in the developed markets, emerging markets saw a 40% slide in revenue.
Tough COVID-19 conditions and elective surgery shutdowns have hurt the company throughout 2020 with sales postponed, surgeries canceled and sales slipping
Cochlear CEO Dig Howitt said the company was “pleased with the pace” of recovery across developed markets, but the company has flagged they are cautious about the broader global recovery.
“Second waves of COVID-19 cases are likely to be a reality for some time,” the company said in the pre-meeting update.
This would complicate the broader recovery of elective surgery markets and sales and surgeries for Cochlear’s key product suite.
At the AGM Cochlear chairman Rick Holliday-Smith strongly defended the company’s $1.1 billion March capital raising, after questions that the company raised “too much” money.
Cochlear was one of the first companies to issue a profit warning due to the impact of Covid-19, reducing its guidance on February 11 as the rest of the market marched towards the late March highs.
It raised capital and accepted over subscriptions to the original target of just over $900 million.
“Did we raise too much? I think it’s too early to say. We did all we could to ensure a decisive outcome,’’ Mr Holliday-Smith told the meeting yesterday.
“There is no doubt that market conditions were far from ideal and extremely dangerous… but in our case, we were witnessing the effects of COVID in key markets,” he added.
“We determined we needed to raise equity quickly, and we believe it was balanced and fair.”
Investors agreed and the shares rose yesterday to $225.30, the highest price since February 24 before easing in the afternoon after the meeting. The shares ended up 2.3% at $222.97.
