CSL profits up

man standing next to arrow that points up: CSl profits

Double digit sales growth in albumin and speciality products and influenza vaccine sales have helped CSL announce a net profit after tax of US$692m (A$889m) for the six months ended 31 December 2014. This is up US$47m (A$60m) when compared to the prior comparable period while earnings per share also grew by 10%.

“A key achievement in the first half was the completion of our agreement to acquire Novartis influenza vaccine business—company’s first major acquisition in a decade—and we have since made excellent progress in planning for integration,” says CSL CEO and managing director Paul Perreault.

“The deal will vault CSL to number two in the global influenza vaccine industry, a sector we understand intimately. Together as one business, we will have a diverse product portfolio, extensive global sales reach and the appropriate scale of R&D and manufacturing capabilities to leverage and compete globally.

“Double digits growth was achieved in both albumin and speciality products. Influenza vaccine sales are very strong, up 24% following a severe influenza season in the northern hemisphere.”

“Investments in key growth initiatives remain on track, including our multi-site capacity expansion,” Perreault says. “We recently announced our intention to build a new albumin facility in Australia and we received regulatory approval for our expanded albumin production facility in the US.”

Commenting on CSL’s outlook, Perreault says: “We expect that global demand for plasma therapies will continue to grow, but the market will become increasingly competitive, with new competitors and new products.

“The company continues to have a strong outlook; however, in light of current trading conditions we have tempered our net profit after tax guidance for FY15 to approximately 10% at constant currency. This growth is prior to the inclusion of integration costs associated with the acquisition of the Novartis influenza business. Earnings per share growth is again anticipated to exceed profit growth,” Perreault says.

CSL Behring sales of US$2.5bn (A$3.2bn) grew 8% in constant currency terms when compared to the prior comparable period.

Immunoglobulin product sales of US$1,122m (A$1440m) grew 5% in constant currency terms, with normal immunoglobulin volume growing 11%. Global market conditions remain robust, but competitive. Intravenous immunoglobulin sales growth was underpinned by strong demand for Privigen, which benefited from an expanded indication in Europe to include its use in the treatment of chronic inflammatory demyelinating polyneuropathy (CIDP). The average immunoglobulin sales price was negatively impacted as a greater proportion of sales were made into lower priced markets

Albumin sales of US$358m (A$459m) grew 16% in constant currency terms, driven by ongoing strong global demand. Demand in China grew particularly well, boosted by improved penetration into hospitals.

Haemophilia product sales of US$558m (A$716m) grew 3% in constant currency terms. Plasma derived haemophilia sales grew 5%, boosted by success in several European tenders and the treatment of additional immune tolerance patients. Recombinant factor VIII also grew modestly after securing a number of European tenders. This market, however, remains competitive particularly with new entrants.

Specialty products sales of US$443m (A$568m) grew 13% in constant currency terms, with growth tempered by a sales decline of wound healing products in Japan. Excluding these sales, the remaining group of specialty products grew 16%, driven largely by sales of Kcentra and Berinert.

During October last year, CSL announced its intention to conduct an on-market share buyback of up to A$950m. Under the Australian Securities Exchange listing rules this buyback has a 12 month completion window. To date, CSL has repurchased approximately 1.3m shares for approximately A$108m, representing about 11% of the intended repurchase program.

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