Fisher & Paykel Healthcare experienced unprecedented demand for its breathing aids during the early stages of the Covid-19 pandemic.
- Fisher & Paykel Healthcare’s annual profit fell 28%
- The company is coming off a period of huge demand for its products
- Revenue from its key hospital division fell 19%
Fisher & Paykel Healthcare reported a 28% drop in annual profit as demand for its breathing aids slowed from the unprecedented high levels during the earlier stages of the Covid-19 pandemic.
Profit fell to $376.9 million in the year to March 31, from $524.2m a year earlier, the company said in a statement to the NZX on Wednesday. Revenue slid 15% to $1.68 billion, in line with the company’s forecast for revenue of between $1.675b to $1.7b.
Fisher & Paykel experienced a surge in demand for its Airvo devices and Optiflow consumable products during the pandemic as hospital clinicians turned to nasal high flow therapy as a front-line treatment for Covid-19 patients. Over the last two financial years it has supplied $880m of hospital hardware, the equivalent of about 10 years’ worth of hardware sales prior to Covid-19.
“The last several years have been remarkable for our company,” said managing director Lewis Gradon.
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But demand for its breathing aids is now starting to slow, with revenue from its key hospital division, which includes humidification products used in respiratory, acute and surgical care, down 19% to $1.2b.
Most of the deaths occurred in Southeast Asia, Europe and the Americas, according to a WHO report issued on Friday.
Gradon said the company had supplied an “extraordinary” amount of hospital hardware over the last two financial years, but warned sales of the devices were now expected to fall.
“Covid-19 may have peaked in many parts of the world for the time being, and many countries have boosted their hospital treatment capacity,” he said. “As a result, we do not expect hospital hardware revenue for the 2023 financial year to continue at FY22 levels.“
Over time, the company expects hospital clinicians to use the extra respiratory machines purchased during the pandemic for an increasing proportion of respiratory-compromised patients in general, Gradon said.
“If the change in clinical practice occurs over a three-to five-year time-frame, it would drive strong growth in hospital consumable sales over this period,” he said.
Still, the uncertainty ahead meant the company could not provide guidance for the coming year, he said.
“Given the ongoing uncertainties regarding our customers’ stockholding choices and their capacity to implement new protocols with personnel shortages and the possibility of further surges of Covid-19 over the near term, we are not currently providing quantitative revenue or earnings guidance for the 2023 financial year,” Gradon said.
Higher freight costs weighed on the company’s gross profit margin, which fell to 62.6% from 63.2%, and Gradon said the margin was likely to be at a similar level this year.
Fisher & Paykel increased its final dividend to 22.5 cents, bringing the full-year dividend to 39.5c from 38c the year earlier.
The directors approved a profit-sharing payment of $19m to employees who have worked for the company for a qualifying period.