CSL Tightens Guidance As Investors Zone In On Vaccine Boost

Blood plasma giant CSL has raised the lower end of its profit guidance for the 2021 June 30, predicting growth of between 3% and 8% in the range of $2.17 to $2.65 billion – a tightening from its August results where the lower end of growth was for no growth.

However, CEO Paul Perreault told yesterday’s virtual AGM that COVID-19 restrictions are continuing to curb the company’s ability to collect plasma, the blood product which is critical to the company’s suite of specialist medical products.

“We do have multiple initiatives underway to mitigate the impact,” Mr. Perreault said.

CSL shares rose 7% at one stage before easing back to close up 1.4% at $302.50.

CSL is really a COVID-19 vaccine story in waiting, so investors are not looking at current operations all that closely, but they are hanging on every mention of COVID-19 and coronavirus vaccines.

The meeting was told the company expects its Seqirus vaccine business to continue to benefit from its differentiated products and strong demand for influenza vaccines.

The latter is being driven in part by Governments wanting to protect their populations from contracting COVID and influenza. And that seems to have been the right tune for investors in CSL yesterday

A COVID-19 vaccine and boost for the company won’t appear in any meaningful way until well into 2021-22 and probably more likely 2022-23.

CSL’s Albumin sales are expected to normalise following the successful transition to its new business model in China.

Management is also expecting strong demand for its plasma and recombinant therapies to continue.

However, due to COVID restrictions, which are expected to restrain its ability to collect plasma, the costs of collection are expected to increase but the meeting was told the company is looking at new ways of overcoming those headwinds.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

View more articles by Glenn Dyer →