CSL announces profit dip and $900m share buyback

CSL, Australia’s biggest biotech and the world’s second largest producer of plasma blood products today reported an eight percent dip in full year net profit to $1.05 billion, as a rising Australian dollar dented overseas revenues.

The result came in just under analyst’s expectations, leading investors to shave 2.68 percent off CSL’s share price today, the stock closing at $31.90.

The company said that it would buy back $900 million worth of its own stock, citing expected further declines in profit this year due to the global flu pandemic coming to an end and with a drop in sales of its H1N1 swine flu vaccine. CSL also pointed to expected weaker sales due to US and European healthcare reforms and austerity measures.

Total revenues were down eight percent for the year to $4.36 billion, while EBIT (earnings before interest and tax) were $1.36 billion, compared to $1.37 billion for the previous corresponding period. In particular, CSL reported a slowdown of growth in royalties from its cervical cancer vaccine Gardasil.

CSL managing director Brian McNamee said that while the forecast profit is marginally down on that recorded for 2009-10, it nevertheless represented growth of up to 10 per cent on the underlying operational profit, largely reflecting expected growth in CSL's global plasma therapeutics business. Operating profit excludes the effects of both declining pandemic influenza vaccine H1N1 sales in fiscal 2011 and the impacts of U.S. and European healthcare reforms and austerity measures.

CSL announced a final dividend of 45 cents a share, compared to 40 cents for the full year to June 2009.