The CSL Ltd [ASX:CSL] share price is down today after they delivered a Net Profit of $2.375 billion.
CSL share price opened at $293.64 and reached a high of $302.80 — and are currently trading at $290.33 per share, down 2.55%.
Sinking into the March low, in a 12-month time frame CSL share price traded sideways.
CSL was mainly in a consolidation phase amidst the pandemic and shed around 1%.
Here are CSL’s FY21 results and the outlook for CSL shares going forward.
CSL FY21 highlights
Let’s start from sales.
Sales and service revenue increased by 13% to $9.979 billion from $8.796 billion, which made the total revenue stand at $10.310 billion, up 13%.
Gross profit was up 9% to $5.675 billion.
All these key financials led the Net Profit After Tax (NPAT) to increase by 13% to $2.375 billion, from $2.102 billion.
Moreover, CSL reported Earnings Per Share (EPS) of $5.22, up to 10% at CC (Constant Currency).
The Final Dividend came at $1.18 per share, which made the Total Full-Year Dividend climb 10% to $2.22.
Mr Paul Perreault, CSL’s Chief Executive Officer and Managing Director, said:
‘I am pleased to report a strong result against a backdrop of very challenging conditions brought on by the global COVID-19 pandemic.
‘Despite the uncertainty and complexities we have faced, our CSL Behring and Seqirus businesses maintained all critical operations and we have continued to deliver our life saving and life extending medicines around the world.
‘I am proud of the way our dedicated employees have remained focused. They have been asked to work in different ways and in different settings and have shown great resolve to keep our promise to patients. This is a testament to our values and the Company’s resilience and agility.’
CSL’s operational highlights
It is important to dive deeper into CSL’s operations and understand the progress there.
CSL Behring and Seqirus, together, delivered some impressive results.
CSL Behring revenue was up 6% to $8.574 billion due to several reasons.
Immunoglobulin sales were up 3% while Albumin sales were up by a whopping 61%.
The company explained that this is due to volume growth in the EU and other emerging markets. However, there was a decline in the US due to supply chain constraints.
Again, according to CSL, their China business now has a new distribution model fully operational with sales now normalised.
On the other hand, haemophilia sales were down 4% while Specialty Products sales were up 2%.
Lastly, 25 new centres for Plasma Collection were opened in FY21 which partially offset the overall revenue due to high costs.
As for their Seqirus segment, it was up a significant 30% in revenue to $1.736 billion.
There was significant growth in seasonal influenza vaccines driven by an ongoing shift to ‘differentiated products.’
Furthermore, a record volume of 130 million doses were distributed globally which further impacted the overall revenue.
FLUAD® QIV was launched in the US while FLUCELVAX® was launched in Australia. This step helped sales grow by significant numbers.
Outlook for CSL shares
CSL worked hard to deliver some solid results and outperform the FY21 guidance.
However, with unexpectedly impressive results this year, CSL is hinting that FY22’s revenue may fall off a bit.
CEO Paul Perreault also said:
‘At the half-year results, we foreshadowed margin easing as a result of increased plasma costs, this will continue into FY22. We see FY22 as a transitional year as we continue to invest and deliver against our long term strategy.
‘CSL’s net profit after tax for FY22 is anticipated to be in the range of approximately $2,150 million to $2,250 million at constant currency.’
This may explain the strange price action we witnessed today.
Furthermore, CSL is investing heavily in R&D which may make certain investors antsy about future profits and thus dividends.
But the bright side is that CSL is reinvesting the profits into themselves which may act as a catalyst for investors in the future.
This strategy could help CSL to raise the dividend yield and satisfy their shareholders further down the track.
CSL is a fascinating case study in how a former growth darling may change into a steadier dividend stock over time.
While CSL’s dividend yield currently stands at less than 1%, this may change.
If dividends are on your mind — be sure to check out The Rum Rebellion’s report on Greg Canavan’s Top Five Dividend Stocks for 2021.
Some of these dividend stocks are left-field choices, it’s well worth a read.
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