CSL (ASX:CSL) delivers US$1.7bn half year profit and tips plasma collection rebound

CSL has handed in its report card…

| More on:
A CSL scientist looking through a telescope in a lab

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • CSL has released its half year results
  • As expected, plasma collections headwinds have weighed on its results
  • Management expects plasma collections to rebound following a number of initiatives

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.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Earnings Results

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Earnings Results

ASX 200 stock jumps 10% on strong FY24 results

How did this KFC restaurant operator perform in FY 2024?

Read more »

A male investor wearing a white shirt and blue suit jacket sits at his desk looking at his laptop with his hands to his chin, waiting in anticipation.
Consumer Staples & Discretionary Shares

Guess which ASX 200 stock just slashed its final dividend by 23%

This retailer had a tough time during the 12 months. Here's how it performed.

Read more »

Man jumps for joy in front of a background of a rising stocks graphic.
Earnings Results

Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

A strong annual result from this tech player has caught investor attention.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Earnings Results

Xero share price leaps 8% on staggering earnings upheaval

A major turnaround in profitability is sending investors into a frenzy over Xero shares today.

Read more »

a construction worker sits pensively at his desk with his arm propping up his chin as he looks at his laptop computer while wearing a hard hat and visibility vest in a bunker style construction shed.
Materials Shares

Which ASX 200 stock just plunged 12% despite record full-year earnings?

It looks like an impressive report card but UBS doesn't like the FY25 guidance.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Earnings Results

ASX 200 tech stock lifts off on another record-setting half-year profit

Investors are bidding up the ASX 200 tech company following its half-year results.

Read more »

increasing rural asx share price represented by happy looking sheep
Earnings Results

Why is this ASX All Ords stock staying strong as profits crash 76%

How is this company's share price marching higher after mowing down more than three-quarters of its profits compared to a…

Read more »

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »