The CSL Limited (ASX: CSL) share price has risen after the biotech giant announcing its FY21 half-year report.
CSL’s strong FY21 half-year result
Australia’s biggest healthcare business reported that its net profit after tax (NPAT) grew by 44% in constant currency terms to US$1.81 billion. Its earnings per share (EPS) also grew by 44% to US$3.98.
CSL was pleased to show that it achieved profit growth across various parts of its business.
The company said there was solid growth of its core immunoglobulin portfolio, led by HIZENTRA. CSL also said that there was strong growth in the leading HAE product HAEGARDA.
Perhaps unsurprisingly in these times of a coronavirus pandemic, there was “exceptionally strong” performance by Sequirus. This division more than doubled its EBIT (EBIT explained) to $693 million. This was driven by large growth of seasonal flu vaccines with record demand and the ongoing shift to Seqirus’ differentiated and high value product portfolio.
CSL told investors that it has successfully transitioned to its own distribution model in China. Total albumin sales grew by 93%. Chinese albumin levels now reflect a more normalised level with the new distribution model expected to improve the participation in the value chain and strengthen sales, marketing and distribution network.
Overall, CSL said that its diversified portfolio and resilient business model in the midst of the COVID-19 pandemic is performing well.
It fully recognised the financial impact of contracted impact for the University of Queensland COVID-19 vaccine in the first half, after the program’s termination a couple of months ago.
CSL dividend
CSL announced that it was increasing its dividend in US dollar terms by 9% to US$1.04 per share. However, converted to Australian dollars, this represents a reduction of 9% to A$1.34 per share.
Management comments and outlook
CSL said that demand for CSL’s core plasma and flu vaccine products remain robust. It’s expecting another strong year from Seqirus. However, consistent with the seasonal nature of the business, it’s expecting a loss in the second half of the year.
Its plasma collections continue to be affected by the pandemic, but it has introduced measures to combat this.
CSL CEO and Managing Director Paul Perreault said: “We remain the industry leader in opening new plasma collection centres and investing in future innovation – positioning CSL to emerge strongly when the COVID-19 crisis recedes.”
CSL is expecting FY21 profit to be in the range of $2.17 billion to $2.265 billion, representing growth of up to 8% year on year.
Summary thoughts
This was a strong result from CSL, considering how large it already is. This growth shows how important CSL products are in the current environment. CSL shares could be a consideration for a long term buy, I like how much it re-invests for more growth. However, smaller ASX growth shares are earlier on in their growth runways.
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