The CSL Limited (ASX: CSL) share price finished March down 1.5%, largely in-line with the flat ASX 200 and 0.67% fall for the S&P/ASX Health Care (INDEXASX: XHJ).
The CSL share price has seemingly gone nowhere since its all-time record high of $332.68 back in February 2020. Despite the lacklustre share price performance, the company has continued to lift earnings. Additionally, it has played a pivotal role in the global pandemic.
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Classic CSL growth
CSL delivered a strong set of results for the six months ended 31 December. Its revenue increased 16.9% to US$5,739 million. This can be broken down into a 9% increase in CSL Behring revenue and 38% jump in Seqirus revenue. The company also acknowledges that the pandemic has tempered with Behring's performance, whilst boosting the performance of Seqirus.
Solid revenue growth was backed by higher margins. This translated to a 45% surge in net profit after tax to US$1,810 million.
Eyes on plasma collections
Plasma is an essential raw material for many of CSL's therapies. Plasma collection headwinds has been a key factor that has dragged the CSL share price since the start of COVID.
The company has said that its "plasma collections have been adversely affected during the pandemic". Furthermore, collection volumes in December 2020 represented~80% of December 2019 volumes.
Macquarie Group Ltd (ASX: MQG) provided its view on the plasma collection environment on 26 March. The note highlights that foot traffic for CSL's ~100 US-based plasma collection centres had fallen in recent weeks. This was also consistent trends across key states. Current foot traffic on a 7-day rolling average basis was below levels recorded over July-December 2020.
The note acknowledges that there is a seasonal weakness across late-February to early-March. This is associated with the timing of annual tax returns. This should be followed up with a steady improvement from mid-March to June according to 2019 data.
Macquarie has put more emphasis on the absence of improvement in recent weeks, resulting in a neutral rating for CSL shares.
What's next for the CSL share price?
CSL has continued to demonstrate earnings growth despite the disruption in its supply chain. The company has forecasted FY21 net profit after tax to be in the range of approximately US$2,170 million to US$2,265 million at constant currency. This represents a 3.2% to 7.7% increase on FY20 NPAT of US$2,103 million.
