Shares of CSL Ltd (ASX:CSL) tumbled to eight-year lows on Wednesday following the release of its half-year financial results, which showed a decline in underlying profit and a steep fall in reported earnings after several one-off charges.
For the six months ended Dec. 31, the company said underlying net profit after tax attributable to shareholders dropped 7% to $1.9 billion. Reported net profit plunged 81% to $401 million, a fall the company attributed to one-off restructuring costs and asset impairments recorded during the period.
Sydney-listed shares slid as much as 12.4% to A$150.21 - their lowest level since February 2018.
The company disclosed that the previous evening, after market close, it had named Gordon Naylor as interim chief executive, replacing Paul McKenzie.
On a constant currency basis, revenue declined 4% to $8.3 billion. Within CSL’s operating divisions, CSL Behring sales were down 7%, a decrease the company linked to lower immunoglobulin and albumin sales following recent Medicare reforms in the United States and policy changes in China.
CSL recorded after-tax impairments of about $1.1 billion, largely associated with intellectual property at its Vifor and Seqirus units. Management said these impairments reflect pressures from generic competition and reduced demand for vaccine technologies related to COVID-19.
Despite the half-year setbacks, the company reiterated its full-year guidance and announced an increase in its share buyback program to $750 million. CSL said it anticipates that second-half growth will be supported by immunoglobulin and albumin sales together with contributions from recently launched products.
The results highlight a mix of operational and non-recurring impacts on the company’s earnings - from policy-driven volume declines in key markets to strategic write-downs tied to competitive and demand shifts. Market reaction was swift, with the stock moving sharply lower during trading.
Market context
- Underperforming sales in key product lines linked to policy changes in major markets weighed on revenue.
- Significant impairments were taken against intellectual property at Vifor and Seqirus, reflecting competitive pressures.
- Leadership change announced with an insider appointed as interim CEO following the results.