Earnings Highlights

Fisher & Paykel 1H25 Earnings Call Highlights

Thu 28 Nov 24, 11:08am (AEDT)
Respiratory machine in a hospital
Source: Shutterstock

Fisher & Paykel Healthcare (ASX: FPH) shares have slipped 2.6% in early trade on Thursday after its full-year guidance missed analyst expectations.

1H25 Earnings Highlights

  • Operating revenue up 18% to $951.2 million

  • Net profit after tax up 43% to $153.2 million

  • Interim dividend up 3% to 18.5 cents per share

  • Reaffirmed FY revenue guidance between $1.9-2.0 billion

  • Reaffirmed FY net profit after tax guidance between $320-370 million

The reaffirmed FY25 guidance falls short of Macquarie forecasts of $358 million (3.6% miss).

Phone

Earnings Call Highlights

1H25 earnings: “Operating revenue for the half was NZ$951 million, up 18% on the prior period, so that's 17% in constant currency. Net profit after tax was NZ$153 million, up 43% on the prior period, or 51% in constant currency.”

Hospital revenue guidance: “For our Hospital product group, we expect similar contributions in the second half from change in clinical practice and new product introduction s… Hospital consumables is the big move up and in any second half projection for us, and that's due to the inherently unpredictable nature of seasonal hospitalisations.”

Seasonal trends: “The second half that we're lapping has the second biggest flu season in 15 years and a material COVID component. And so it seems reasonable to expect those components to come down.”

Overhead efficiency gains: “Overhead efficiency was a significant contributor to this improvement. We grew our overheads at a much lower rate than our production volume compared to the same half last year.”

Margins and margin outlook: “Operating margin was 22.9% for the half. That was an increase of 394 basis points or 420 basis points in constant currency from the same period last year … reflects the improvement in gross margin as well as our operating expenses growing below our revenue growth.”

Chinese manufacturing facility impact on margins: “Our manufacturing site in Guangzhou is now operational following receipt of regulatory clearance.”

Capex guidance and outlook: “Capital expenditure for the full 2025 financial year is expected to be approximate NZ$120 million.”

Operating expenses and outlook: “Total operating expenses grew 11% in both reported and constant currency compared to the same period last year. This is in line with expectations given the impact of the people that we added throughout FY24.”

Product innovation: “We released our F&P 950 system in the United States in April, and this coincided with the US launch of Airvo 3 as well … Both of these additions have added to the momentum in our Hospital business.”

Long-term growth runway: “We continue to invest in developing the home respiratory support opportunity. And then 15 year plus, we're building out our surgical technologies products.”

director

Analyst Q&A Highlights

Will overhead efficiencies from the first-half of 2025 continue at the same rate in the second half? “We probably wouldn't expect them to carry on at the same cadence. So the overhead efficiency will get less as we go through and grow into the overhead structure that we've got. So that we will diminish over time that we would expect. And then the improvement, the impact from the improvements can be very lumpy depending on when they kick in.”

How is the better-than-expected revenue performance for the first-half driven, and what parts outperformed expectations? “Expectation is a range. So, you know, I probably would describe it as within expectation is within a range. We think helping it's along in hospital, you know, you don't get census data for another 12 months to 18 months officially. But if you look at the early reporters, early indicators for census, we think census is probably up in the half, maybe in the 4% to 5% range. So we think that's a contributor. And when we look at our volumes and FY24 flu season, FY24 flu season was kind of not a big peak but longer. And we think that 2016 that into April, May be a little bit. So we think there's a bit of a tailwind from that in there.”

With the first half being stronger than expected, why hasn’t the second half guidance been upgraded, and what are the current trading signals for the second half? “When we first gave guidance, we were thinking of our top end as a comparable seasonal hospitalisation rate to last year. And when we look at the first half we've had, we're kind of restating the top end to equivalent to what would have historically been a moderate seasonal. So that was the first part of your question. Current trading period, we don't see any signal that would point us either direction on the seasonal impact yet.”

How are you thinking about the potential impact of tariffs in the current political environment, especially concerning US-Mexico relations? “We've got to think about the long term. We got to think about where the opportunities are. And also, if I think the other key point for us is that, you know, we do provide products and therapies that improve care and outcomes. So whatever your scenario, we feel that that does give us some flexibility to work with our customers on mitigating what things that might come our way. But the other comment, although otherwise, for us, we're thinking about the growth, how we grow out, where the growth goes, where the manufacturing for growth goes.”

Can you provide an idea of CapEx for FY26 and FY27? “The big lumpiness in there, though, is for land and buildings. So we've still got about NZ$60 million to pay for the Karaka site in January, across January and December 2026. And then we're going to start building our fifth building here at East Tamaki, probably the beginning of next financial year. So FY26 and FY27 there will be the building costs for the building. So they will be certainly more elevated CapEx over FY26-27.”

Are you still pricing it at a premium? “Yeah.”

This article was generated with the support of AI and reviewed by an editor.

 

Written By

Earnings Highlights

Content

Your go-to resource for concise summaries of company earnings calls.

Get the latest news and insights direct to your inbox

Subscribe free