Attention Virtus Health Ltd (ASX: VRT) shareholders, look away now…
Earlier today, shares of Australia's leading IVF company were the market's worst-performing — experiencing falls as deep as 19% below the opening price.
The company said it is currently experiencing weak IVF cycle volumes.
"Medicare data released on 25 January 2017 confirmed that activity in the Australian market in the second quarter continued to fall below prior year levels with fresh cycle activity reported by Medicare in H1FY17 in Virtus state markets falling by 6.0% compared to the prior year comparative period. Virtus fresh cycle activity in Australia in this half has decreased by 7.2% on a like for like basis."
The market conditions, as well as low-cost competition, were key reasons for the reduced expectations. However, Virtus could not give a precise forecast of the impact they would have.
"The exact level of the shortfall is highly dependent on fresh cycle activity in the second half of the financial year, and in particular, activity in the final quarter," the company said. Adding, "We anticipate that volumes and margin in our TFC activities in Queensland will come under pressure in H2FY17 as a result of increased low cost competition."
While the future remains bright for Virtus, in my opinion, with no real way of knowing how the financials are being effected it may be a wise to avoid Virtus Health shares until the dust settles.
