CSL shrugs off toughest of times, sees blue skies ahead

CSL – Shares in Australia’s largest pharma company are up 6 per cent at the time of writing, following a $US1.76 billion ($2.46 billion) interim profit which was down 5 per cent, but in line with expectations given the tough environment brought about by the Covid pandemic. One of the biggest challenges the company faced was being unable to collect plasma, a core part of its business.

Here are some of the highlights:

• CSL share price on watch after solid half
• Total revenue up 5.3% to US$6,041 million
• Gross profit margin down 3.4 percentage points to 57.1%
• Net profit after tax (NPAT) down 2.8% to US$1,760 million
• Net profit in constant currency down 5% to US$1,722 million
• Interim dividend flat at US$1.04 ($1.46) a share
• R&D investment up 13% to US$486 million

The fall in headline profit was due to a decline in CSL Behring’s revenue due to plasma supply issues. But on the other hand, the vaccine arm, Seqirus, lifted its revenue by 18 percent on the back of strong growth in seasonal vaccines. CSL saw very strong demand for influenza vaccines over the US and European winters, as the pandemic had ultimately served as a reminder of the benefits for all types of vaccines. Here in Australia, heaalth authorities are gearing up for the first real influenza season in three years. CSL should increase revenue through strong sales of seasonal flu vaccines.

CSL foreshadowed that the difficulties collecting plasma over the course of the pandemic would contribute to falling numbers however, with lockdowns nearing the end and business returning to normal, plasma collections should revert to normal.

The company declared an interim dividend of $US1.04 per share.

Later in the year CSL will complete the acquisition of Swiss firm Vifor Pharma for $16.4 billion, gaining a foothold in rapidly growing markets for kidney disease and iron deficiency treatments that complement its core immunodeficiency and haemophilia therapies. The company has forecast full-year 2022 profits of between $2.15 billion and $2.25 billion on constant currency terms, including up to $110 million in transaction costs for the Vifor takeover.

At levels about $264, CSL is trading well south of the analysts’ consensus target price in FN Arena’s collation, at $312.94.

Ishan Dan

Ishan is an experienced journalist covering The Inside Investor and The Insider Adviser publications.