Why Cochlear’s (ASX:COH) statutory profit surged 50% in first half

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Why Cochlear’s (ASX:COH) statutory profit surged 50% in first half

 Why Cochlear’s (ASX:COH) statutory profit surged 50% in first half

Summary

  • Cochlear’s (ASX:COH) statutory net profit increased 50 per cent to A$236.2 million for the six months ended December 2020 (HY21) compared to A$157.7 million in the corresponding period of last year on several one-off gains.
  • The underlying net profit fell 6 per cent to A$125.3 million and 4 per cent in constant currency during the period.
  • The company re-introduced an interim dividend of A$1.15 per share, a payout of 60 per cent of underlying net profit.

Cochlear Ltd (ASX:COH) on Friday announced a rise in statutory net profit on account of patent litigation-related tax & other benefits, innovation fund gains and COVID-19 government assistance (after-tax).

The statutory net profit increased 50 per cent to A$236.2 million for the six months ended December 2020 (HY21) compared to A$157.7 million in the corresponding period of last year on several one-off gains. The underlying net profit fell 6 per cent to A$125.3 million and 4 per cent in constant currency during the period.

Image Source: © Cmmeraydave | Megapixl.com

The sales revenue fell 4 per cent to A$742.8 million, with the first quarter down 8 per cent and the second quarter up 7 per cent. 

Cochlear said the momentum was continuously improving across the half as surgeries recovered following COVID-19 shutdowns. While the company recorded a strong growth in the US, Japan, Korea and China, momentum improved in Western Europe. A slower recovery was seen across most emerging markets.

Image Source: Cochlear ASX update, 19 February 2021

Dividend

The company re-introduced an interim dividend of A$1.15 per share, a payout of 60 per cent of underlying net profit.  

READ MORE: Why QBE Insurance (ASX:QBE) posted full year net loss

Outlook

According to Cochlear, the underlying net profit for the 2021 financial year would be in range of A$225 million and A$245 million. The earnings guidance factored in slower January and February trading as a result of recent COVID-19 surgery slowdowns. With a number of major projects now complete, capital expenditure is expected to be around A$70 million for FY21 and in the range of A$60 million to A$80 million for FY22.

Stock performance 

Shares of Cochlear closed at A$204.50, up 0.14 points, or 0.069 per cent on Thursday, 18 February 2021, against the previous closing on Wednesday, 17 February 2021.

READ MORE: ASX 200 to open 0.5% lower: rally in crude oil pauses

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