The CSL Limited (ASX: CSL) share price is under the spotlight after announcing its FY23 half-year result.
CSL is one of the biggest companies on the ASX. It produces of different healthcare solutions including vaccines and iron deficiency treatments.
HY23 result
Here are some of the highlights from the half-year report:
- Revenue rose by 25% in constant foreign exchange rate terms to US$7.6 billion
- EBITDA (EBITDA explained) rose 9% in constant foreign exchange rate terms to US$2.69 billion
- EBIT improved 16% to US$2.58 billion in constant foreign exchange rate terms
- Underlying net profit after tax (NPATA) increased by 13% to US$2 billion in constant foreign exchange rate terms
- Interim dividend of US$1.07 per share declared, in AU terms this is A$1.55 per share, up 9%
CSL revealed that it saw strong growth in immunoglobulin (up 19%) and albumin sales (up 11%). It also saw strong growth in its market-leading haemophilia B product called IDELVION and key specialty product called KCENTRA.
The ASX healthcare share noted that there was a strong performance by its influenza vaccines business which is called CSL Seqirus. It saw 9% revenue growth.
There were promising signs for future growth. It saw record levels of plasma collections (up 36%), and a licence agreement for late-stage self-amplifying mRNA vaccine technology. This could be useful for the CSL share price.
The plasma collections underpins its ability to manufacture its plasma products, which is “excellent news for patient care”. Eight new plasma centres were opened during the period.
CSL also completed the acquisition
of Vifor Pharma. It saw 15% revenue growth. This business has a portfolio focused on renal disease and diseases of iron deficiency. The integration is well advanced and cost synergies are on track.
Outlook for the CSL share price
The company is expecting ongoing growth for plasma collections and immunoglobulins. Seqirus is expected to perform strongly. The launch of HEMGENIX in the US is “exciting, groundbreaking”.
The company’s underlying net profit, the NPATA, for FY23 was affirmed and anticipated to be in the range of between $2.7 billion to $2.8 billion in constant currency terms.
Considering the circumstances, this seemed like a solid result. I think CSL has a good long-term future. However, I’m just not sure that the CSL share price deserves the earnings multiple it trades it because it’s already such a large business. The growth rate over the next decade is likely to be lower than the last decade.
There are smaller ASX growth shares I’d rather invest in first.
