Why Cochlear’s (ASX:COH) shares would be closely tracked today

August 19, 2022 09:13 AM AEST | By Ashish

Why Cochlear’s (ASX:COH) shares would be closely tracked today — Image source: © Miluxian | Megapixl.com

Highlights

Cochlear reported a rise in sales revenue in FY22.

The company reported an 11% fall in net profit to AU$289.1 million.

Cochlear declared a full year dividend of AU$3 per share.

Cochlear (ASX:COH) on Friday reported a rise in sales revenue in FY22, buoyed by driven by robust demand for acoustic implants and sound processor upgrades. The hearing aid manufacturer announced that all its operating regions and product segments tracked above pre-COVID levels.

The ASX-listed Cochlear reported an 11% fall in net profit to AU$289.1 million on 10% (9% in constant currently) rise in sales to AU$1.64 billion for the year ending June 2022. It said adjusted net profit grew 18 per cent to $277 million. The company reported an 18% rise in underlying net profit to AU$277 million, within the guidance range of AU$265 to AU$285 million. The underlying net profit margin stood at 17%.

A final dividend of AU$1.45 per share, with full year dividend of AU$3 per share was declared by the company’s board. It implies an increase of 18% on last year and representing a payout of 71% of underlying net profit.

Financial position

Cochlear’s net cash rose AU$22 million to AU$587 million, driven by strong free cash flow generation, with operating cash flows increasing by AU$111 million to AU$377 million and free cash flow increasing in the range of AU$57 million to AU$238 million

FY23 guidance

Cochlear guided for an underlying net profit in the range of AU$290 million to AU$305 million in the financial year 2023, implying a rise of between 5% and 10% on FY22 underlying net profit. It amounts to an increase of 8% to 13% when adjusted for the rise in cloud computing-related expenses.

The company expects robust growth in sales revenue and an underlying net profit margin of nearly 18% before cloud computing-related expenses. Cochlear anticipates trading conditions to improve across 2022. “A more material disruption from COVID or hospital capacity restrictions that significantly impacts sales remains a risk factor that does not form part of guidance,” Cochlear also said.

Cochlear’s share price snapshot

Cochlear’s share price fell nearly 4% on a year-to-date (YTD) basis. In the past 12 months, the share price has fallen over 16%. However, the shares have gained over 6% in the past month. The stock’s 52-week high and low stand at AU$257.76 and AU$178.54, respectively.

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