The Atomo Diagnostics Ltd (ASX: AT1) share price is falling today after the company reported its half-year results.
The company's shares are currently swapping hands at 14.7 cents each, a loss of 18.33% on the day so far.
Let's take a look at what the diagnostic testing company reported to the market after close yesterday.
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Atomo share price slips amid half-year results
Highlights of the company's half-year (H1 FY22) results include:
- Gross profit fell 30% to $1.76 million, down from $2.52 million in the previous corresponding period (PCP)
- Gross margin of 33%, down from 55% in the PCP
- Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of -$1.48 million
- Revenue up 17% on PCP (H1FY21) to $5.34 million
- Cash balance of $13.68 million at 31 December 2021
What else happened in the half?
The company said its overall gross revenue from customers grew 53% to $7 million versus the PCP. This was driven by the huge demand for COVID-19 tests. There was also growth in sales of HIV self-tests.
Atomo sold 420,000 rapid COVID tests in the first half of the 2022 financial year although the company said its January sales have outstripped total sales for the entire first half. Since then, however, market demand has fallen as "Omicron infection rates drop and free government tests impact the market".
Nonetheless, the company has more than 120 enterprise and government customers and is still seeing demand for its products.
Management commentary
In its investor presentation, Atomo said Therapeutic Goods Administration (TGA) has "significantly relaxed" conditions of supply related to home-use, self-test products in Australia.
Given greater acceptance of home testing in the community Atomo sees an opportunity to commercialise a range of rapid tests in the local market and has first mover advantage in HIV as well as established consumer product support established in country.
What's next
In the near term, Atomo sees "immediate" revenue growth potential for COVID rapid testing. In the medium term, it foresees consumers globally accepting rapid testing in the home and the increased importance of home-based healthcare solutions.
Long term, it predicts fewer regulatory barriers to home testing, particularly in the United States. It expects well-capitalised market entrants building home-delivered healthcare will emerge. And there will be more demand for convenient healthcare services.
The company said the diagnostic market has "permanently changed".
Atomo believes it can continue to meet demand for COVID tests in the Australian and New Zealand markets. HIV testing is also an opportunity and Atomo plans to target commercial agreements in the USA and China. The company also believes it has "first mover" advantage on Australia's HIV self-test market.
The company's cash balance has increased by more than $2 million since 31 December to $15.8 million at 31 January 2022.
Atomo Diagnostics share price summary
The Atomo Diagnostics share price has sunk 46% in the past year and is down 50% year to date.
For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 5% over the past year.
Atomo has a market capitalisation of roughly $61 million based on today's share price.
