On 16 October 2018, the chairman of Cochlear Limited (ASX: COH) addressed the shareholders of the company in the annual general meeting about an update regarding the increase in the net profit by 10% as compared to the previous year. The company made a net profit of the order of $246 million for FY18. In fiscal year 2018, the company was engaged in creating awareness and building market access of the Cochlear implants. The company was busy in expanding marketing activities and capabilities related to customer service. The company made extensive investment in fields of research and development in order to maintain its commitment towards the product innovation. The company made a successful launch of Nucleus 7 Sound Processor and Baha although the progress was steady. The launch of Nucleus 7 Sound Processor and Baha lays the foundation towards the growth in earnings through solid sales of the product. The company had achieved a milestone by reaching the implant sale of 500,000. During the year, the company tried to raise hearing awareness with the World Health Organization and actions to prevent and how to treat hearing loss. The company during the entire year increased their investment in regards to the health economics and their capabilities to access the market. The company also made investments to build collaborative partnerships with medical research community. COH was also focusing to obtain clinical evidence that demonstrates the effectiveness of the product launched and raised awareness about the importance of hearing for the healthy ageing. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]
The company made a sales revenue of $1,351.4 million with a percentage growth margin of 73% and a net profit of $246 million for FY18. As a result of increase in sales revenue by 9%, there was a corresponding increase in the EBIT by $32.8 million. The capital expenditure also increased by $6.7 million due to the additional investment made in the plant, equipment and IT systems. There were other investments as well worth $5.7 million. The company has total assets worth A$1,156.9 million and total liabilities worth $546.1 million. This shows that company has potential to meets its long-term obligations. The total current asset with the company is $584.2 million and total current liabilities are $287.7 million. This indicates that company has potential to clear its short-term obligations. The total shareholders equity is worth $610.8 million. The business was able to generate $258.1 million through operating cash flow and a free cash flow of $202.7 million which got increased by $78.5 million. The net cash used in the investing activities was $55.4 million where major cash outflow was in acquisition of leasehold improvements, plant and equipment worth $25.8 million. The cash used in financing activities was $232.7 million where the major cash outflow was due to the repayment of borrowings and payment of dividend. The net cash and cash equivalent at the end of the year was $61.5 million.
The current market price of the share was $192.25 (up 3.4% on October 17, 2018) with market capitalization worth $10.72 billion and PE ratio of 43.49x. In the stock price trend, we can see that the moving average convergence and divergence line (MACD line) is moving below the signal line.
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