The Healius Ltd (ASX: HLS) share price has been a strong performer on Thursday.
In morning trade, the healthcare company's shares are up 7% to $4.90.
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Why is the Healius share price surging higher?
The Healius share price is storming higher today after investors responded very positively to a first quarter trading update.
According to the release, the company has continued to experience strong demand for COVID-19 testing during the first quarter. So much so, Healius was averaging 40,000 COVID tests per working day during the period.
As you might have guessed from the Healius share price performance, this has underpinned stellar revenue and earnings growth so far in FY 2022.
The release explains that the company's first quarter revenue increased 43.7% over the prior corresponding period to $689.9 million. And thanks to effective cost control from Phase 1 of the Sustainable Improvement Program, its underlying earnings before interest and tax (EBIT) grew 159% to $201.9 million.
What else did the company say?
While COVID testing was the biggest driver of its strong growth, it wasn't the only part of the business performing positively.
Management advised that its non-COVID revenue was stronger than expected during the quarter despite the various lockdowns.
Healius' CEO, Dr Malcolm Parmenter, commented: "For our communities, over and above the COVID testing efforts, Healius continues to deliver essential frontline healthcare services safely, efficiently and effectively through lockdowns and as restrictions lift."
"With communities now learning to live with COVID and adjusting for the new normal, we expect PCR testing to continue to be pivotal to Australia's COVID response and the gold standard for testing. As restrictions ease, even with high vaccinations levels, it is expected that the Delta strain will continue to circulate, as evidenced in other international settings. To that end, Healius has invested in additional testing equipment to meet demand for PCR testing and ensure turnaround times are as short as possible, keeping our communities safe," he added.
What about the future?
Dr Parmenter expects COVID testing to be necessary for the foreseeable future but acknowledges that demand will fluctuate. As a result, no guidance is possible at this point.
He explained: "Looking to the remainder of FY22, we believe COVID PCR testing will be part of the health landscape for years, however, we expect that testing levels will fluctuate. There is also a level of uncertainty in relation to the impacts of economies and borders reopening. Our revenue streams may be affected, both positively and negatively, by government responses to further community outbreaks, including lockdowns, restrictions on clinical activity and the level of funding for COVID testing."
"Given this uncertainty, we will continue to update the market periodically on our results, rather than provide profit guidance for FY22," Dr Parmenter concluded.
