Pathology giant Sonic Healthcare has come through the pandemic and lockdowns in good shape, reinstating 2019-20 earnings guidance yesterday and seeing its shares enjoy a 4.7% gain to $30.33.
Sonic’s move to reinstate its guidance came after it pulled it in March as it faced a huge drop in patient volumes because of the coronavirus shutdowns.
Sonic said in its ASX statement on Wednesday that it had suffered “dramatic falls” in revenues across all its global businesses in the second half of March. However, it said it had been testing thousands of patients a day in Australia, the US and Europe for COVID-19 over this period.
While its other testing services significantly underperformed during April, May results improved.
In the last week of June, volumes were back to their pre-coronavirus levels, the company said.
This puts Sonic in the position to forecast FY20 earnings at “a similar level” to last year, when the company’s EBITDA hit $1.075 billion.
CEO Colin Goldschmidt said despite the global disruptions, the company had been fortunate to receive government assistance in a range of countries to cover staffing costs during the shutdown periods.
Mr. Goldschmidt and the senior executive team and board also took 50% pay cuts at the start of the shutdowns. He thanked staff yesterday who had sacrificed financially throughout the pandemic.
Sonic shares have largely recovered from the March selloff, when they dropped as low as $21.67.
Despite the recovery and the reinstatement of the 2020 guidance, Sonic was shy about forecasting for 2020-21.
“Given the current levels of uncertainty related to the pandemic, Sonic is not in a position to provide guidance for FY 2021 at this time, however a further update will be provided with the FY 2020 results release in August 2020,” the company said yesterday.
