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Favourable corporate results were one of the main reasons the global markets, in general, have performed well despite the myriad challenges the world has had to face right from the trade war between the US and China to the emergence of the new coronavirus threat towards the turn of 2020.
The Australian markets have also performed well in 2020 with the S&P/ASX 200 generating returns of 6.60% on a YTD basis (as of 17 February 2020).
The healthcare sector especially has had a great start to 2020 with YTD returns of 17.43%. The sector was aided by impressive half-year results from the most prominent healthcare company on the ASX, CSL Limited. While the sector has faced its own demons with issues including aging population and questions raised over the sustainability of private health insurers, to name a few, it has successfully negated the impact so far in 2020.
In this article, we will look at some of the ASX-listed healthcare stocks that recently reported strong financial results.
CSL Limited (ASX:CSL)
Healthcare behemoth CSL Limited is a biotechnology company specialising in rare, severe indications and also engages in delivering in-licences vaccines. The company, through its businesses CSL Behring and Seqirus, operates in over 70 countries.
Impressive H1 FY 2020 results with double-digit growth in revenue and PAT
CSL announced its first-half results for FY2020 (period ended 31 December 2019) with substantial gains in revenue and profit after tax. Below are the highlights from the announcement:
- CSL revenues were up 11% YoY to reach US$4.98 billion (at cc) while sales rose 10% to reach US$4.78 billion (At cc); CSL Behring and Seqirus reported respective growths of 10% and 9% in product sales;
- Revenue growth was led by the Immunoglobulin and haemophilia portfolios, and Seqirus division’s performance;
- EBITDA stood at US$1.88 billion, a growth of 10% YoY; and
- Net profit after tax (NPAT) rose 11% to reach US$1.29 billion (at cc) while EPS reached $2.85 (at cc), with a growth of 11%.
Stock Performance
CSL shares last traded at $332.550 on 17 February 2020, an increase of 0.411% over the previous day’s closing price. The company has a market capitalisation of $150.32 billion, and outstanding shares of ~453.88 million. CSL has generated positive returns of 20.42% on a YTD basis.
ResMed Inc (ASX:RMD)
ResMed Inc focuses on the management of multiple chronic indications, including chronic obstructive pulmonary disease and sleep apnoea, among others. The company also provides devices and masks as well as accessories for these products.
ResMed announces Q2 FY2020 results; revenue rose 13%, operating profit up 26%
ResMed’s Q2 FY2020 results (period ended 31 December 2019), declared on 30 January 2019, were notable with significant growth across its two segments: total sleep & respiratory care, and software as a service (SaaS). Below are the highlights of the quarterly results:
- Revenues increased by 13% YoY to reach $736.2 million with SaaS segment reporting a 37% rise in revenues;
- Sleep and respiratory care segment registered a growth of 10% to reach $649.5 million. Revenue from devices was up 7% while masks and others grew 16% YoY;
- Gross margin improved slightly at 58.0% (Up from 57.5%) while non-GAAP gross margin also improved to 59.7% (Q2 FY2019: 59.1%);
- Net operating profit was up 26% while non-GAAP operating profit rose 21%; and
- Cash flow from operations stood at $69.9 million, and the company paid dividends worth $56.1 million.
Stock Performance
RMD shares last traded at $26.300 on 17 February 2020, an increase of 0.921% over the previous day’s closing price. The company has a market capitalisation of $37.69 billion, and outstanding shares of ~1.45 billion. RMD has generated positive returns of 18.35% on a YTD basis.
AVITA Medical Ltd (ASX:AVH)
Headquartered in California, US, AVITA Medical Ltd provides regenerative medicinal products for the treatment of chronic wounds, burns, vitiligo and scar revision, among others. The company’s flagship product RECELL® System helps treat a range of skin defects.
AVITA reports revenue of $5.6 million in Q2 FY2020, up 41.6%
AVITA reported its Q2 FY2020 results (period ended 31 December 2019) on 31 January 2020 with RECELL system sales of $4.66 million in the US. Following are the key highlights of the results:
- Total revenue was up 41.6% with the US reporting a significant increase in product sales ($4.66 million vs. $1.10 million in Q2 FY2019). The international product sales declined from $343k to $234k;
- The growth in RECELL System continued with eight additional customers and nine new trained burn surgeons in the latter part of the quarter. The total new accounts for CY2019 was 60 while the number of trained burn surgeons was 166; and
- Total cash receipts stood at $7.69 million, growing by $2.45 million compared to Q1 FY2020.
Stock Performance
AVH shares last traded at $0.845 on 17 February 2020, an increase of 3.681% over the previous day’s closing price. The company has a market capitalisation of $1.73 billion, and outstanding shares of ~2.12 billion. AVH has generated positive returns of 28.35% on a YTD basis.
Pro Medicus Limited (ASX:PME)
Pro Medicus Limited offers solutions including RIS and PACS. The company, through its subsidiary Visage Imaging, provides advanced visualisation solutions and enterprise imaging.
Pro Medicus’ profit after tax rises by 32.7% for H1 FY2020
Pro Medicus reported its H1 FY2020 results (period ended 31 December 2019) on 13 February 2020 with both revenue and net profit after tax (NPAT) registering significant growth. Below are the key highlights of the results:
- Revenue stood at $29.3 million, an increase of 15.7% YoY; all the three geographic regions – North America, Europe and Australia – reported strong growth,
- Profit before tax grew 45.3% to reach $14.8 million,
- Net profit after tax was $12.1 million growing by 32.7%,
- The company’s cash reserves were up 20.2% YoY at $38.8 million, and
- PME signed two new contracts in the 6-month period: a 5-year contract worth $9 million with The Ohio State University and another 5-year deal worth $6 million with Nines Inc.
Stock Performance
PME shares last traded at $23.410 on 17 February 2020, with a decline of 6.472% over the previous day’s closing price. The company has a market capitalisation of $2.6 billion, and outstanding shares of ~103.95 million. PME has generated positive returns of 12.29% on a YTD basis.
