CSL aims to get better bang for buck from plasma
By Emma Koehn
CSL boss Paul McKenzie is looking to make the company’s multi-billion dollar blood plasma business more efficient as the biotech tackles rising costs and foreign currency fluctuations.
Shares in the ASX market heavyweight, valued at over $130 billion, lifted by as much as 5 per cent on Tuesday despite the company confirming that inflationary pressures had hurt its full-year results.
CSL chief executive Paul McKenzie stepped into the top job after Paul Perreault retired in March. Credit: Eamon Gallagher
However, investors were more focused on news that collections of the all-important blood plasma that CSL uses to make its life-saving therapies were up by 31 per cent, hitting record levels after widespread disruptions during the pandemic.
While the cost of collecting that plasma is down by 17 per cent from its March peak, CSL said some input costs – like the fees paid to donors for their plasma in the US – remained above pre-COVID levels.
Underlying gross margins in its blood plasma business, CSL Behring, are lower than they were before the pandemic, and came in slightly behind consensus expectations for 2023, at 49.2 per cent.
McKenzie said CSL had a balancing act to walk on donor fees, while ensuring it can continue to collect enough plasma to satisfy the growing demand for its therapies.
“[Donors] were used to receiving a higher rate during COVID – it’s not like the next day, you can change on them,” he said.
He also highlighted a range of efficiency measures CSL was doing to keep a lid on costs, including a plan to boost the amount of vital antibodies it can extract from each litre of plasma.
McKenzie added CSL was also focused on increasing the efficiency of its collection sites. “One of the things we really concentrate on is that from the time that you walk in the door to the time you leave, on average, are you moving that [the costs] down?” he said.
CSL had previously warned investors that it had faced challenging macroeconomic conditions in the financial year to June 30 that pushed its net profit down 3 per cent to $US2.19 billion ($3.4 billion).
Foreign currency movements had a big role to play in the final result, with management keen to highlight that underlying profit, expressed as net profit after tax and amortisation (NPATA), was up 20 per cent when the impact of currency fluctuations was removed, to $US2.61 billion for the year.
Revenues were up by 31 per cent to $US13.31 billion in constant currency terms, driven by the CSL Behring business, which generated $US9.3 billion thanks to a jump in sales of its major blood plasma therapies. Flu vaccine business CSL Seqirus had a 9 per cent rise in sales to $US2 billion, and the newly acquired CSL Vifor also delivered $US2 billion in its first 11 months in the CSL stable.
UBS analysts said the numbers from all three divisions were in line with expectations. “We expect investors to continue to focus on how to look at costs,” said analyst Laura Sutcliffe.
CSL reiterated expectations that its NPATA for 2024 would come in at between $US2.9 billion and $US3 billion. Shareholders will receive a final dividend of $US1.29 per share, to be paid on October 4, bringing the total payout for the year just passed to $US2.39.
The healthcare index shone on Tuesday as hearing implant maker Cochlear gained more than five per cent after reporting a profit jump, while medtech firm Pro Medicus rose by more than four per cent as investors responded to its full-year profit increase.
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