Hearing implant maker Cochlear Ltd expects to increase its earnings by up to 20 per cent this financial year after boosting first half net profit by 22 per cent.
Cochlear implant unit sales rose two per cent to 9,178. Cochlear implant related sales revenue grew 22 per cent, to $301.1 million for the half year and was up 12 per cent in constant currency. Global market share remains around 70 per cent.
"The result highlights the strength of Cochlear's business in a challenging global environment," said Cochlear chief executive officer Dr Chris Roberts.
Cochlear will pay a fully franked half year dividend of 80 cents on 17 March 2009, representing a 14 per cent increase on the previous corresponding period.
"This is a strong result, confirming our strategy of diversifying our growth drivers within the implantable hearing space," said Dr Roberts. "We anticipate 15 per cent to 20 per cent growth in core earnings in fiscal 2009."
"Long term growth initiatives were further advanced, with the controlled market launch of the new Hybrid system in Europe. This product opens up a new market segment of recipients who will benefit from Cochlear's products," said Dr Roberts.
Clearly the global financial crisis has had a very limited impact on the firm.
"Cochlear is well positioned in this time of significant global uncertainty, and our fundamental strategies around technological innovation, business model innovation and development of internal capability, such as scale and leverage, have not changed," said Dr Roberts.
The Americas delivered higher growth for the half with revenue up 25 per cent to $148.5 million from the previous corresponding period (PCP). This represents 15 per cent growth in constant currency up from eight per cent in the PCP. In Europe r
evenue for the half year grew 25 per cent to $153.1 million from PCP. This represents 13 per cent growth in constant currency down from 24 per cent in the PCP.
Cochlear successfully started selling the Hybrid range of products into selected European markets during the half and initial feedback has been positive. The Hybrid (EAS) system includes the Hybrid L implant and combined speech processor. The device combines electrical stimulation (cochlear implant) with acoustic amplification (hearing aid technology).
The UK NICE Guidelines for cochlear implants were published in January 2009. These guidelines support cochlear implants as an effective intervention for severe to profound deafness in adults and children, including recommending simultaneous bilateral cochlear implantation for children receiving a cochlear implant. This is an important precedent and augurs well for continuing growth in the UK. It also provides guidance to other reimbursement authorities.
Revenue for the half year grew six per cent to $45.3 million in Asia Pacific. There were no donation sales units into China in this half (previous corresponding period 180 units). Sales in India and Korea continued to expand in line with growth expectations.
Stock held by clinics was reduced as clinics took advantage of Cochlear's improved supply chain efficiencies and managed down stock levels while maintaining surgery rates.
One of the long-term projects vital to Cochlear's competitive advancement is the new manufacturing and headquarter facilities at Macquarie University, which has been granted planning approval by the New South Wales Department of Planning in Australia.
Cochlear anticipates 15 per cent to 20 per cent growth in core earnings for the full year, says a company press release.