New Zealand-based healthcare company Fisher & Paykel Healthcare Corp Ltd [ASX:FPH] has posted a record half year, however, the FPH share price is trading lower today.
The dual-listed company designs and manufactures products used in acute and chronic respiratory care, surgery and the treatment of obstructive sleep apnoea.
Its share price has been bolstered during the pandemic with strong demand around the globe for its hospital hardware products.
FPH’s shares plummeted on 10 November when the first effective COVID-19 vaccine was announced.
Shares have recovered steadily since then.
At the time of writing, FPH shares are down 2.45% or 79 cents, trading at $31.41 per share.
Record profit on COVID-19 demand
Today FPH released record second-half results thanks to a surge in demand due to the current pandemic.
The healthcare product manufacturer recorded a net profit after tax of NZD$225.5 million, up 86% on the half year ending 30 September 2020.
Operating revenue rose to $910.2 million, up 59% or 61% in constant currency.
The $18.6 billion company beat analysts’ expectations by 17%, with operating revenue beating market expectations by 10%.
Good news for income investors, with FPH increasing its interim dividend to 16 cents per share, marking an increase of 33% from the year prior.
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FPH said the results were underpinned by a near-doubling of growth in Hospital division revenue to $NZ681.0 million, with hospital products making up three-quarters of the company’s sales.
CEO Lewis Gradon commented on the results:
‘The strong result was driven by the increased demand for the company’s Hospital hardware… This reflected a shift in clinical practice toward using nasal high flow therapy as a front-line treatment for COVID-19 patients in hospital.’
Though not all parts of the company enjoyed such large growth.
The homecare product segment revenue grew by 5% to $NZ226.2 million. FPH attributed the slow growth to the closure of clinics during the pandemic reducing new patient diagnoses.
Gross margins on products contracted during the half year to 61.7%, stemming from the increased use of airfreight and the elevated costs.
What does a post-COVID world look like for FPH?
With vaccines expected to be rolled out through 2021, what can we expect from companies that enjoyed solid growth throughout the pandemic?
FPH doesn’t expect things to slow down.
It upgraded its full-year guidance for NPAT from the $NZD365 million to $NZ385 million it provided in August to $NZD400 million to $NZD415 million.
Full year revenue is tipped to come in at $NZD1.72 billion, up from $NZD1.61 billion previously, sitting at 3% above consensus.
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