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I'm Sage and you’re watching Buzzing Trends. Today we will be discussing
why Fisher & Paykel Healthcare's share price went up 6% this morning.
Fisher & Paykel Healthcare’s shares surged 6.02% in early trade today after the company said
its first-half profits were nearly in line with previous year amid robust demand for respiratory
machines for hospitals. The healthcare firm also said that a rise in transport costs last year
continued to remain a headwind but had begun to cool down. Another headwind for
the firm was the slowed demand for its breathing aids used to treat COVID-19.
For the six months to 30 September 2021, Fisher & Paykel Healthcare delivered
NZ$900 million in operating revenue, down 1%, and NZ$222 million in net profit after tax, down 2%.
The company’s hospital operating revenue came down 2% to NZ$670.2 million,
while the homecare revenue was up 0.3% to NZ$226.9 million.
Hospital product group, including humidification products used in respiratory, acute,
and surgical care, mainly weighed on the company’s performance. The
company’s hospital operating revenue came down 2% to NZ$670.2 million.
Since early 2020, the company has been experiencing increased demand for its
breathing devices as hospitals were in a hurry to stock up on available machines.
With an overall containment of the virus, the admissions in the hospitals have slowed down,
and so have the profits. Despite that, the company continues to see growth in certain areas.
Within the hospital product segment, consumables’ revenue rose 8% in constant currency and reached
67% of segment revenue. The remaining 33% of revenue was from the sale of hardware.
On the other hand, homecare revenue was up 0.3% to NZ$226.9 million.
Despite a rise in freight costs,
the company delivered a 135-basis point rise in its gross margin to 63.1%.
The company said, Elevated freight costs and air
freight utilisation continued but were lower than the same period last year,
impacting gross margin by approximately 190 basis points compared to pre-COVID-19 levels.
Comparing the situation with the first half of the previous financial year, the company’s
managing director, Lewis Gradon stated that the first half of the last financial year
was a period of extraordinary demand during the initial surges of Covid-19.
Despite that, he stated that the first half results for financial year 2022 have been strong.
Now let’s talk about company Dividend.
The company’s board announced a dividend of 17 cents with a record date of 3 December 2021.
Fisher & Paykel anticipates paying NZ$700 million in land and buildings in the
next five years including a fifth building to complete its Auckland campus, the company said.
What is the Outlook for the firm?
Fisher & Paykel Healthcare’s Managing Director and CEO, Lewis Gradon, warned that the second half
could be tough. Gradon said that for the second half, they expect the Hospital hardware sales
will continue to be impacted by COVID-19-related hospital admissions.
However, as they said in the August trading update, many countries have already boosted
their hospital treatment capacity, so Fisher & Paykel Healthcare do not expect
Hospital hardware revenue to continue at an elevated level for the rest of the year.
The company’s stock has risen by 6% to a value of AU$32.08 per share.
The company’s market capitalization stands at about AU$17.82 billion.
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