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CSL's bloody big surprise: 46pc rise
Helping hand... with ZLB, CSL is the world's third biggest maker of blood plasma. Photo: John Woudstra
By Richard Salmons
CSL has emphatically set out its position as a globalised Australian biotechnology company after surprising investors with a near 50 per cent profit leap in the December half.
The net profit rose 46 per cent to $27.2 million, driven by a 60 per cent lift in sales to $335.4 million and what it called a "strong" performance from its ZLB blood plasma unit, purchased from the Swiss Red Cross last year.
"The operations of ZLB Bioplasma have commenced as planned with a strong initial sales performance," CSL chief executive Mr Brian McNamee said.
The result means CSL is now winning more than half its sales abroad, mainly from Europe and North America.
CSL shares jumped $1.40 to $35.20 as investors digested the result, which topped analysts' expectations of a net profit of $18.1 million, down slightly from the previous result of $18.6 million.
"I think most analysts had higher depreciation and amortisation and interest numbers," Burdett Buckeridge Young biotechnology analyst Mr Andrew Goodsall said. He suggested analysts might have over-compensated for the expected costs of incorporating ZLB into CSL's operations.
Contrary to expectations, CSL said it made a net profit of $3.2 million from ZLB in the four months of ownership since the $1 billion deal was concluded.
The ZLB acquisition helped CSL to more than treble assets and make it the world's third biggest maker of blood plasma. As of December, it had 29 per cent of assets in Australia, with the remainder mostly in Europe.
Of $335 million in revenue, 15 per cent was derived from the US and 34 per cent from Europe.
Even so, only 6 per cent of profit originated in the US and 16 per cent from Europe, compared with 78 per cent that was still earned in Australia. And, as earnings per share grew from 13.8c to 17.9c, the interim dividend rose 1c to 9c fully franked.
Analysts said the share price would ultimately be justified by earnings from ventures such as ZLB and the deal struck with the American Red Cross to process some of its plasma and develop a new bandage technology. "They still have a challenge ahead of them, but in that sense the best is yet to come," Mr Goodsall said.
Amrad Corp earned a net profit of $2.6 million in the December half as sales fell 32 per cent to $40.9 million. The net profit improved from a $16.6 million loss in the same period of 1999, though before abnormals Amrad recorded a $2.5 million loss, from $7.7 million previously.
The net profit was largely due to a $7.4 million abnormal profit from the sale of 55 per cent of Amrad Pharmaceuticals to Merck last October. Amrad said the result reflected its restructuring to a biotech company entirely focused on pharmaceutical research and development.
The company is at present engaged in phase one or two trials of three products it has yet to license to international partners.
Amrad shares rose 5c to $1.11 yesterday.
The Age
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