The Somnomed Limited (ASX: SOM) share price has spiked today after the sleep treatment company reported its earnings to the ASX for the six months to December 31, 2019 (1H20).
Somnomed is a medical company specialising in the treatment of patients suffering from sleep-related disorders such as obstructive sleep apnoea, which the company notes affects up to 9% of women and 25% of men globally. It has over 545,000 patients worldwide and a market capitalisation of $211 million on current prices.
SOM shares closed at $3.30 yesterday but opened at $3.33 this morning and is trending higher since, going for $3.36 at the time of writing – a rise of 2.13%. Earlier this morning, Somnomed's share price touched $3.37, which was a new 52-week high for the company. The Somnomed share price has now risen 106% in the past year.
What did SomnoMed announce today?
Pleasingly for the company, Somnomed announced a 15% increase in revenues to $33.256 million for 1H20, up from 1H19's $28.815 million.
Revenue growth was strongest in the North America region, which saw a 26% increase. European sales saw a 10% rise while the APAC (Asia Pacific, including Australia) region saw an 11% bump.
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) came in at $3 million, which is a 130% increase on 1H19's $1.3 million.
Compared with the previous six months (to June 30, 2019), the company has seen its Total Assets rise from $34.8 million to $42.7 million, while Total Liabilities has also increased from $16.9 million to $22.6 million – translating into Net Assets of $20.1 million (up from $17.8 million).
The company (in continuing with its policy in prior years) did not pay a dividend during the period.
Outlook for 2020
Somnomed has reiterated its guidance for FY20, for which it estimates revenues to come in the $67-$69 million range and earnings in the $6.3-$6.7 million range. There is no notice nor indication the payment of a dividend in FY20 will occur.
The company notes that it has nearly 550,000 patients and yet the global addressable market for obstructive sleep apnoea is estimated at roughly 1.36 billion people, with 54 million in the United States of America alone and a further 49 million across France and Germany.
Somnomed is hoping that this large addressable market will provide fertile ground for its new SomnoDent Avant product, which it hopes will prove to be a more comfortable and effective treatment solution for obstructive sleep apnoea.
