Covid Lawsuit Boosts F&P Healthcare H1 Profit Up to 86%

Fisher and Paykel Healthcare said their first half net profit jumped 86 percent to $ 225.5 million, driven by demand for their respiratory products that emerged from the Covid-19 pandemic.

The company said that based on the largest hospital hardware sales to date, its full-year net profit was estimated to be between $ 400 million and $ 415 million, up from its August forecast of $ 365 million to $ 385 million. .

F&P Healthcare said the result was driven by increased demand for the company’s hospital hardware, particularly its “Optiflow” and “Airvo” systems.

“This reflected a shift in clinical practice towards the use of high-flow nasal therapy as a first-line treatment for Covid-19 patients in the hospital,” he said.

In the hospital products group, which includes products used in acute and chronic respiratory care and surgery, operating income increased 93 percent in the first half of the previous year to $ 681 million.

Hospital products made up three-quarters of the company’s operating income.

“Sales of hardware and consumables continued to see surges in Covid-19 globally, as the virus moved across Europe, North America, South America and South Asia,” said CEO Lewis Gradon.

In the home care product group, which includes products used in the treatment of obstructive sleep apnea (OSA) and high-flow nasal therapy at home, operating revenue increased 5% to $ 226.2 million. .

Gradon said that since the pandemic began, many sleep clinics have been closed, leading to a reduction in diagnoses of new patients.

He said the company’s “F&P Evora” and “F&P Vitera” masks for OSA had not yet reached their full potential.

The reduction in gross margin over the six-month period to 61.7% was due to the increased use of air transportation and the high costs associated with it.

Excluding these additional freight costs, the gross margin was in line with the first half of the previous year in constant currency terms.

F&P Healthcare declared an interim dividend of 16 cents per common share, 33% more than last year’s interim dividend.

Gradon said the company could not predict the course of Covid-19, the effectiveness or adoption of preventive measures, the progress of a vaccine and its results, the impact on future hospitalization rates, or the investments countries can make in measures. treatment.

He said the forecast for the entire year was based on the following assumptions:

• Hospital hardware sales return to normal levels as of January 2021.

• Use of your hospital hardware returns to approximately normal rates for the second half of the financial year.

• OSA diagnostic rates are reduced for the second half of the financial year due to limited access to clients.

• Freight costs remain high, resulting in a reduction in gross margin of approximately 200 basis points.

F&P Healthcare, the largest New Zealand company listed on the NZX by market capitalization, designs, manufactures and markets products for respiratory systems.

The company’s shares last traded at $ 34.05, having gained 63 percent in the past 12 months.