CSL profit dips 10pc to $1.2b in its centenary year

Wednesday, 17 Aug 2016 09:03:00 | Stephen Letts

CSL's core plasma business underpinned its result. (freeimages.com: Marcelo Terraza)

The one-time Commonwealth Serum Laboratory (CSL) has celebrated its centenary with another solid profit in excess of $1 billion, despite slipping slightly.

CSL, which traces its formation back to World War I, when an isolated Australia needed to develop its own supplies of serums, plasma and medicine — reported a full year net profit of $US1.24 billion ($1.6 billion).

The slip in profit was partially due to integration of the recently acquired and underperforming Novartis influenza business as well as currency movements.

On an underlying and constant currency basis — stripping out one-off effects and currency movements — profit rose by 5 per cent to $US1.42 billion (1.84 billion), in line with analyst expectations.

Sales revenue on a constant currency basis — the company's preferred measure — was up 8.6 per cent to $US5.9 billion ($7.7 billion).

The core plasma business again underpinned the result, with sales up 10 per cent, while the newly created Sequirus flu vaccine division — which includes the Novartis acquisition — disappointed and was not helped by a mild flu season in the Northern Hemisphere.

Flu business to breakeven in 2018

However CSL chief executive Paul Perreault said a turnaround in the flu business was on track to deliver a breakeven result in the 2018 financial year.

Mr Perreault said group profit — on a constant cash basis — was expected to grow 11 per cent this year after adjusting for the ongoing turnaround program in Seqirus.

In the meantime Seqirus, which is now the world's second largest flu business by volume, is expected to lose money again next year.

Mr Perreault noted CSL's balance sheet was sound, with its debt at historic lows, and flagged another possible $US500 million share buy back on top of the now almost complete $US1 billion buy-back launched last year.

The full-year dividend edged up 3 per cent to 128 US cents (166 cents).

CSL shares dropped 6 per cent to $109.71 by 10:50am (AEST)

External Link: CSL datawrapper

AustraliaPlus

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CSL profit dips 10pc to $1.2b in its centenary year

Flu business to breakeven in 2018

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