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UPDATE 2-Australia's CSL sees another record profit in 2020; shares soar

Published 14/08/2019, 01:03 pm
© Reuters.  UPDATE 2-Australia's CSL sees another record profit in 2020; shares soar
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* CSL sees 7%-10% jump in FY20 net profit

* Shares rise as much as 7.4%, boost broader index

* Record FY profit at $1.92 billion, up 11% (Recasts, adds share move, analyst comment, segmental sales)

By Rashmi Ashok and Aditya Soni

Aug 14 (Reuters) - Australian biotech major CSL Ltd CSL.AX on Wednesday reported its best annual profit on strong U.S. demand for its plasma therapies and expects to top this performance in 2020, sending its shares to an all-time high.

The country's fourth-largest listed company by valuation said it expects net profit in fiscal 2020 to grow in a range of $2.05 billion to $2.11 billion, on a constant currency basis.

However, it expected the pace of profit growth to be up to 7%-10%, slightly lagging behind the 11% growth it posted in 2019. But investors appeared unconcerned as the slower pace included an already flagged hit to albumin sales.

CSL's stock rose as much as 7.4% to a record high, boosting gains in the overall market .AXJO .

Earlier this year, the company had said that it expected albumin sales in 2020 to drop by around $340 million to $370 million, as it moves from a third-party distribution system to direct distribution in the domestic Chinese market.

However, analysts perceived the move as positive, prediciting that the distribution change may help the company 'grease the wheels' and move towards having its own domestic production in China. way they are engaging with the Chinese market is very positive. With these companies you need to be able to absorb some restructuring costs upfront and not necessarily take a big win in the first year," said James McGlew, executive director of corporate stockbroking at Argonaut.

Revenue from CSL Behring, its flagship immunoglobulin and plasma business based out of the United States, rose 7.6% to $7.34 billion for the year, with sales of its drugs Privigen and Hizentra surging over 22%.

"Its largest franchise, the immunoglobulin portfolio, is doing very well and demand for their plasma products is very very strong," McGlew added.

U.S. sales were also robust, up 12.8% for the period.

The former government laboratory's net profit after tax rose to $1.92 billion in the year ended June 30, from $1.73 billion a year earlier.

It declared a final dividend of $1 per share, up from 93 cents it paid last year.

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