CSL injects expansion plans into its strategyELI...

CSL injects expansion plans into its strategy
ELI GREENBLAT
February 18, 2010

CSL chief executive Brian McNamee will spur growth by pushing into regions such as Russia, Brazil, Mexico, China and the Middle East while harnessing premium margins from a stable of new therapeutic products.

The blood plasma company, long tagged by many analysts and the market as a ''defensive stock'', yesterday delivered anything but a dull result: a 23 per cent rise in half-year profit to $617.4 million.

The result included a currency hit of $46 million. Stripping out the exchange rate item, CSL's profit was a 32 per cent improvement on the previous corresponding period.

Dr McNamee said global demand for plasma-derived products was expected to keep growing and this, combined with the uptake of innovative plasma therapies, would underwrite the company's growth and profitability.

The veteran chief executive confirmed that CSL would achieve full-year profit guidance of between $1.16 billion and $1.26 billion, representing 14 to 24 per cent growth, but that the final result would land at the upper end of the range.

In a market that has caned companies for missing profit targets this season, investors piled into CSL on the upbeat earnings forecast, sending its shares nearly 7 per cent higher. They closed up $1.65, or 5.1 per cent, at $33.90.

During the half, sales of its swine flu vaccine contributed $160 million to sales, although this was partially offset by dwindling royalties from its breakthrough HPV cervical cancer vaccine as that immunisation program in Australia draws to a close. Sales of the Gardasil vaccine were $18 million, down $66 million on the previous corresponding half.

Dr McNamee said he saw plenty of high-quality organic growth in wider medical uses for its blood plasma business, CSL Behring, as well through expansion.

In October, CSL inked a strategic alliance with GlaxoSmithKline to enter the Russian Federation and the company is generating double-digit growth from a push into China. ''I would have to say it's almost like BRIC-plus if you threw in the Middle East,'' he said.

He said therapies Hizentra and Privigen were among a group of new products likely to boost earnings over the next decade.

CSL declared an interim dividend of 35 a share, up from 30 in the previous corresponding period.


CSL

Profit $617.4 million+23%


Revenue $2.415 billion +2%

EPS 106.34 +24.5%

Dividend 35 +17