Healthcare Dynasty with Fisher & Paykel Share Price & Cochlear Post Profit/Loss Reporting

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Healthcare Dynasty with Fisher & Paykel Share Price & Cochlear Post Profit/Loss Reporting

 Healthcare Dynasty with Fisher & Paykel Share Price & Cochlear Post Profit/Loss Reporting

Summary

  • Hospital hardware sales of Fisher & Paykel have continued to steadily increase over the first four months of FY21 with over 390% cc revenue growth to the end of July compared to pcp.
  • Fisher & Paykel disclosed that, at current exchange rates, full-year operating revenue for FY21 would be ~NZ$1.61 billion and NPAT would be in the range of NZ$365 million to NZ$385 million.
  • Cochlear Limited posted ~A$238 million loss amid COVID-19 pandemic and patent litigation expenses.
  • Cochlear implant units dropped by 7% to 31,662. The implant units increased by 13% in 1H20 but dwindled by 26% in 2H20.

The ongoing COVID-19 pandemic is affecting every business across the world. During this reporting season, many companies are updating their annual reports; some are heavily impacted by the turmoil while for some COVID-19 is proving to be a boon.

Some ASX-listed healthcare companies have generated profit amid the pandemic while some of the others went belly up due to COVID-19-induced shut down measures.

The healthcare sector has consistently outperformed the benchmark index during 2020 driven by growing demand for healthcare products and services amid the pandemic. On 18 August 2020, S&P/ASX 200 Health Care Sector settled at 43,637.9, indicating a rise of 4.23% compared to the previous close, while benchmark index S&P/ASX 200 traded at 6,123.4, up 0.77%.

Today we will acquaint you with two ASX-listed healthcare companies- FPH, COH

Fisher & Paykel’s Hospital Consumables Revenue Rose by 48% for the first four months of FY21

Dual-listed healthcare company, listed on ASX and NZX, Fisher & Paykel Healthcare Corporation Ltd (ASX:FPH) is a leading developer and marketer of products as well as systems for application in acute and chronic respiratory care, surgery and treatment of OSA. The products of Fisher & Paykel are sold in over 120 nations across the world.

On 18 August 2020, Fisher & Paykel provided an update on its trading activities for the first four months of FY 2021.

For the four months ended July 2020, robust demand for hospital respiratory care products of the Company continues to track the spread of COVID-19 worldwide. This indicates a transforming trend in clinical practice to lead with nasal high flow therapy to treat COVID-19 patients in the hospital.

Financial highlights from the first four months of FY21-

  • Fisher & Paykel disclosed that its Hospital hardware sales have continued to steadily grow over the first four months of the fiscal year 2021 with over 390% revenue growth (at constant currency) to the end of July 2020 compared to pcp.
  • With a resilient finish to 1Q FY21, for the first four months of the FY 2021, hospital consumables revenue of FPH increased by 48%.
  • Overall, Hospital product group revenue has increased by 91%, compared to pcp and in constant currency.
  • Revenue (Constant currency) growth in OSA masks for the first four months of FY21 was 4% compared to the same period of FY19.
  • Growth in-home respiratory support is more than offsetting a decline in OSA flow generators, resulting in Homecare revenue growth of 5% to the end of July, in cc terms, compared to pcp.

GOOD READ: Fisher & Paykel Healthcare: A Star in Respiratory Care Devices Market

Moreover, the Company notified that the global sales of both invasive ventilation as well as Optiflow consumables in July 2020 have returned to similar levels to the peak that was witnessed in April 2020. This would suggest the usage of the greater installed base of Hospital hardware combined with a change of clinical practice to support nasal high flow therapy for COVID-19 patients.

Managing Director and CEO Lewis Gradon stated-

Notably, Fisher & Paykel disclosed that, at current exchange rates, full-year operating revenue for the fiscal year 2021 would be ~NZ$1.61 billion and net profit after tax (NPAT) would be in the range of NZ$365 million-NZ$385 million.

Status as Essential Service Amid Resurging of COVID-19 Cases

On 12 August 2020, Fisher & Paykel stated that it is designated an “essential service” following the announcement by the Prime Minister of New Zealand that the COVID-19 alert status would be raised to Level 3 in Auckland.

As an essential service, the Company will continue to manufacture as well as supply respiratory products from its Auckland facilities. Fisher & Paykel continued to operate effectively during March and April 2020 under the criteria of more restrictive lockdown (Level 4).

Stock Information- On 18 August 2020, the share price of Fisher & Paykel stood at A$33.250, edging up 4.428%. With a market capitalisation of almost A$18.3 billion, FPH has 574.9 million shares trading on ASX.

Cochlear Limited Posts A$238 Million Loss amid COVID-19 and Patent Litigation Expenses

A global frontrunner in providing implantable hearing solutions Cochlear Limited (ASX:COH) is engaged in the development along with the supply of implantable hearing solutions to give a lifetime of hearing outcomes. The Company markets its formulations in over 100 nations and is operating across the divisions covering Americas, EMEA, and the APAC regions.

On 18 August 2020, Cochlear disclosed its financial results for FY20 (year ended June 2020) revealing a solid start to FY20 with cochlear implant units increasing by 13% in the first half.
However, during the second half of FY20, the impact of patent litigation expenses and COVID?19 pandemic on sales revenue resulted in the reporting of a net loss of A$238.3 million.

Despite these impacts, Cochlear has retained its commitment to investing in market growth activities as well as research & development programs for enabling the business to come out from the ongoing COVID-19 turmoil in a stronger competitive position.

FY20 Highlights from the financial front-

  • Cochlear’s sales revenue declined by 6% to approximately A$1.4 billion, with the 1H sales increasing by 9% and 2H dwindling by 22%.
  • The implant units of Cochlear dropped by 7% to 31,662 with the first half increasing by 13% and the second half declining by 26%.
  • Underlying net profit of the Company during FY20 dropped by 42% to A$153.8 million because of the rapid fall in sales in 2H due to COVID?19?related surgery deferrals.
  • Cochlear reported a net loss of A$238.3 million, including almost A$416.3 million in patent litigation expenses and A$24.2 million in innovation fund gains after?tax.

Moreover, in March 2020, Cochlear suspended the dividend until the better trading conditions; consequently, no final dividend has been declared.

Highlights from the operational front-

  • Cochlear disclosed that the launch of the Cochlear™ Nucleus® Profile™ Plus Series implant was received well, leading share gains in many markets.
  • During the first half, cochlear implant units rose by 13% as the Nucleus Profile Plus Series cochlear implant was launched across major markets.
  • Services of the Company were materially impacted by COVID?19 pandemic in 4Q of FY20. Although some recipients have been able to access upgrades in sound processor remotely, clinic closures have impeded access to upgrades in the sound processor for many individuals.

ALSO READ: Cochlear Gets a Big Tick From US FDA - Share Price Moves Up

Trading update and FY21 outlook

  • Operating expenses, excluding R&D cost, are projected to rise by around 4% with the growing investment in market growth activities.
  • Investment in R&D is anticipated to climb in the range of A$190?A$195 million.
  • The Company anticipate receiving some further government support following the receipt in FY20 of A$24 million in COVID?19 related government assistance from several countries.
  • FX contracts gains/(losses) are projected to be close to zero as an outcome of minimal hedging in the fiscal year 2021.
  • Depreciation & amortisation (including AASB16?related) is anticipated to be roughly A$80 million.

Stock Information- On 18 August 2020, COH share price stood at A$217.740, climbing by 9.803%. The market capitalisation of the COH stock stood at almost A$13.03 billion.

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