Fisher & Paykel Healthcare's full year profit has taken a major hit, as it has been unable to replicate the rapid growth it achieved during the height of the pandemic.
The medical equipment manufacturer produces face masks, dehumidifiers, and breathing related devices, which have shown to be effective at treating people with Covid-19.
Key numbers for the year ended March compared to a year ago:
- Net profit $376.9m vs $524.2m
- Revenue $1.68bm vs $1.97b
- Final dividend of 22.5 cents per share vs 22 cps
The company said the "strong result" followed an unprecedented year in 2021.
"Over the last two financial years we have supplied $880m of hospital hardware, the equivalent of approximately 10 years' hardware sales prior to Covid-19," chief executive Lewis Gradon said.
The result was broadly in line with market expectations of a profit of $379.5m and revenue of about $1.7b.
The company had been a benefactor from the outbreak of Covid because of high demand for its breathing devices from hospitals globally, as they were effective at treating Covid-19 patients.
But earnings have tailed off since the early stages of the pandemic as cases appear to have peaked.
Sales to North America, Europe and "Other" regions fell 19 percent, 26 percent, and 33 percent respectively over the year.
However, sales throughout Asia Pacific were 26 percent higher than a year ago at $438.8m.
There company's margins came under pressure over the year, following higher use of premium air-freight services and elevated freight costs.
Revenue from its hospital division were down 19 percent to $1.2 billion, but sales from its home product group, which includes its sleep apnea and home respiratory devices, saw revenue growth of 1 percent to $469.5m.
Looking ahead, Gradon said it did not expect hospital hardware revenue for the current financial year to continue at the rates seen in FY22.
He estimated that the average utilisation rate of these products was 60 to 70 percent of a pre-Covid-19 midpoint and expected that over time clinicians would make use of the equipment for other treatments.
"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 high freight costs would continue to weigh on its margins and that the company was also carrying more inventory to help mitigate supply chain shortages.
Forsyth Barr analyst Matt Montgomerie said the result had minimal surprises.
"Our FY23 base case is a sharp decline in hospital hardware revenue and modest growth in consumables revenue.
"Despite the revenue uncertainty, we expect [operating expenditure] growth broadly in-line with history as FPH invests for growth."
The release of company's full year financial results coincided with the announcement that it had three new products.
Its Optiflow Swtich and Optiflow Trace consumable products were designed for anaesthesia.
"We see an opportunity to improve outcomes for patients undergoing anaesthesia and believe that these new products will contribute to our aspiration of sustainable profitable growth over the long term," Gradon said.
It also unveiled a new piece of hardware, Airvo 3, which generates high flows of respiratory gases to be delivered to the patient via a variety of consumable face/nasal masks that the company sells.