Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
CSL’s gift that keeps on giving
CSL (ASX:CSL) delivered a robust earnings result with profit up 10 per cent to US$2.375 billion ($3.3 billion), which was a slight beat on a consensus earnings expectation of US$2.33 billion ($3.2 billion).
The strong result reflected CSL’s resilience and agility during the COVID-19 pandemic, through which it has been able to record strong growth in immunoglobulin (IG) product HIZENTRA and excellent numbers in its hereditary angioedema (HAE) product HAEGARDA®.
CSL was also able to develop a new distribution model in China that is now fully operational, with sales of albumin now normalised, and record exceptionally strong performance by the influenza vaccines business, Seqirus. Earnings per share (EPS) was up 10 per cent to US$5.22 with the final dividend coming in at US$1.18 per share. This takes the total dividend to US$2.22 ($3.08), up 10 per cent.
Paul Perreault, CSL’s chief executive officer and managing director says he was pleased to report a strong result against a backdrop of very challenging conditions brought on by the global COVID-19 pandemic. “Despite the uncertainty and complexities we have faced, our CSL Behring and Seqirus businesses maintained all critical operations and we have continued to deliver our life saving and life extending medicines around the world,” Perreault says.
Two highlights from the result were the Albumin and Influenza businesses. Albumin sales grew significantly by 61 per cent, boosted by the new distribution model in China, which gives direct management of over 180 distributors. The influenza vaccines business, Seqirus, also delivered a strong performance, with revenue up 30 per cent (constant currency)at CC2. This came on the back of a rise in seasonal influenza vaccines driven by record demand and the ongoing shift to Seqirus’ differentiated and high-value product portfolio.
Despite the headlines, CSL’s production of the Astra Zeneca vaccine has reached 50 million doses, a huge achievement, with the majority of production may well being exported, given domestic hesitancy. What it reflects, though, is a truly innovative and nimble business.
CSL provided guidance for NPAT for FY22 is anticipated to be in the range of approximately US$2,150 million to US$2,250 million ($3 billion to $3.1 billion). As investors flock to cyclical or recovery plays, high-quality companies like CSL continue to be overlooked, representing a rare opportunity for patient investors.
Overall, it was a great result from the vaccine business, but slight downgrade on future guidance. CSL suffered lower blood plasma collections due to the pandemic. However, there is upside with the construction of a new world-class manufacturing facility in Australia. which will be used to produce influenza vaccines for use in both influenza vaccination and pandemic programs.
CSL Behring
Total revenue +6%
HIZENTRA® +15%2
HAEGARDA® +14%2
KCENTRA® +7%2
Albumin +61%2
Seqirus
Total revenue +30%
Seasonal influenza vaccine sales up 41%
Record volume ~130 million doses
FLUAD® QIV launched in the US
FLUCELVAX® launched in Australia
