The CSL Limited (ASX: CSL) share price will be one to watch closely today.
This follows the release of the biotherapeutics giant's eagerly anticipated half-year results.
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 per share
- R&D investment up 13% to US$486 million
What happened during the first half?
For the six months ended 31 December, CSL reported a 5.3% increase in revenue to US$6,041 million. This represents a 4% increase to US$5,993 million in constant currency.
Management advised that this was driven by a 2% decline in CSL Behring revenue to US$4,216 million and an 18% lift in Seqirus revenue to US$1,592 million.
This reflects strong growth in seasonal vaccines, market-leading haemophilia B product Idelvion, and specialty products Kcentra and Haegarda. Softer immunoglobulins and albumin sales due to constrained plasma collections in FY 2021 partially offset this.
However, due to a 3.4 percentage points decrease in its gross margin, CSL's profits were lower year on year. It reported a 5% constant currency decline in net profit after tax to US$1,722 million.
But despite its weaker earnings, the CSL board has elected to maintain its interim dividend at US$1.04 per share.
Over the six months, the CSL share price rose by just 2.55%, outdoing the S&P/ASX 200 Index at 2.46%.
Management commentary
CSL's CEO, Paul Perreault, commented: "CSL has delivered a result in line with our expectations in a challenging environment brought about by the ongoing impacts of the global COVID pandemic."
Perreault was quick to address the elephant in the room – plasma collections. He said:
Our core franchise, the immunoglobulin portfolio, has been impacted by the industrywide constraints on collecting plasma in FY21 during the course of the global pandemic. We have responded by implementing multiple initiatives in our plasma collections network, which has given rise to significant improvement in plasma volumes collected. Given the long-term nature of our manufacturing cycle, this will underpin stronger Ig and albumin sales going forward.
The CEO also highlights the strong rebound in HPV royalties and the impressive performance of the company's vaccines business, Seqirus. Perreault said:
HPV royalties were up 134% as sales rebounded strongly to pre-COVID levels following strong demand and increased supply. Our influenza vaccines business, Seqirus once again delivered a strong performance with revenue up 17% at CC. This was achieved by significant growth in seasonal influenza vaccines driven by record demand and Seqirus' differentiated and high-value product portfolio.
Outlook for CSL share price and earnings
CSL has reaffirmed its guidance for FY 2022. This will mean an NPAT in the range of approximately US$2.15 billion to US$2.25 billion at constant currency.
Though, it is worth noting that this guidance now includes US$90 million to US$110 million in transaction costs related to the Vifor Pharma acquisition. These costs were not part of its original guidance, so this is a quasi-upgrade of sorts.
This guidance is expected to be underpinned by improvements in plasma collections and increased demand for flu vaccines.
Perreault explained:
Following the initiatives we have implemented in our plasma collections network, collections have been improving and are expected to underpin stronger sales in our core plasma therapies. Seqirus continues to perform strongly as increased demand for influenza vaccines together with our differentiated product portfolio will see it deliver another profitable year. Consistent with the seasonal nature of the business we anticipate, however, a loss in the second half of the year.
