COVID Still Driving FPH Revenue as Earnings Surge

Fisher & Paykel Healthcare has seen worldwide demand for its breathing devices continue to soar during pandemic, boosting revenue 73% in the nine months to the end of December.

The company told the NZX and ASX on Friday that thanks to COVID, its hospital hardware sales, and the use of its hospital devices, has been stronger than previously estimated.

The company told the market that its earlier revenue and guidance guidance from November were out of date. It currently expects revenue and net profit after tax for the 2021 financial year to be higher than implied by those previous assumptions.

The company did not give dollar values for the new guidance or the performance to the end of December. But in the six months to September, the company reported an 86% jump in net profit after tax to $US225.5 million, (or 87% in constant currency) on a 59% rise in operating revenue of $NZ910.2 million (or 61% in constant currency).

The November announcement gave full year guidance for operating revenue of “approximately $1.72 billion, and net profit after tax … approximately $400 million to $415 million.”

That has been abandoned but no new estimates given. But with the surge in total revenue, the company looks like reaching $NZ2 billion in revenue and more than $NZ450 million (a record) in net after tax profit.

“In many parts of the world, we have continued to see an influx of Covid-19 patients requiring hospitalisation for respiratory treatment,” said managing director and chief executive Lewis Gradon on Friday, releasing an update for the nine months ended December 31.

“Healthcare professionals are dealing with pressures unlike anything they have faced before.”

The company said revenue grew 113% in its hospital product group, which includes products used in acute and chronic respiratory care and surgery.

Over this same period, Hospital hardware grew 446% and hospital consumables grew 54%, both in constant currency.

In the Homecare product group, which includes products used in the treatment of obstructive sleep apnea (OSA) and respiratory support in the home, operating revenue grew a more sedate 6% over the nine months to 31 December 2020 in constant currency.

“Given the significant uncertainties associated with the course of COVID-19, the effectiveness or adoption of preventative measures, the progress of vaccines and their outcomes and the impact on future hospitalisation rates, we have no basis on which to provide formal guidance to results for the full 2021 financial year.

This nine month trading update includes the following observations: Hospital hardware sales and usage continue to generally track local hospitalisation surges in countries around the world; the volume of air freight continues to be higher than normal and freight costs remain elevated; in Homecare, OSA diagnosis rates continue to be reduced, offset by strong growth in our products used for nasal high flow therapy in the home; andbthe company continues to progress the acceleration of investment in manufacturing capacity.”

 

Glenn Dyer

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 →