The Ansell Limited (ASX: ANN) share price is surging higher this morning after the manufacturer released a business update in light of the growing global coronavirus crisis. Ansell shares are currently trading 17.75% higher at $27.33.
The Ansell share price has fared better than most over the past few weeks due to the company's relatively strong position within the healthcare product supply space. Ansell produces personal protective equipment including face masks and gloves which can be used in the fight against the coronavirus.
Strong demand for hand, body and surgical glove products
Ansell noted that it has been experiencing recent high demand for its hand and body protection products under the AlphaTec brand, as these products are industry certified for protection against infections. In addition, the company is experiencing very strong demand for its single-use examination gloves and surgical gloves.
These products are very likely to see increased demand over the next few months as the crisis continues.
Decline in demand for industrial products & supply chain disruption
However, the healthcare products company did acknowledge that it anticipates declining demand in the weeks and months ahead for some of its industrial products. This comes as many nations go into temporary lockdowns and are impacted by export restrictions, especially in the EU, in order to curtail the spread of the virus.
Logistics is also likely to be increasingly impacted, with further delays and disruptions to transport links and local distribution expected over the short term.
Ansell noted that it is working closely with government authorities to ensure that it can continue to manufacture essential protective products and distribute them to the highest priority areas.
The company is also streamlining production to ramp up capacity where required, including maximising the utilisation of manufacturing locations that are currently not affected by the coronavirus outbreak. Ansell believes that it remains well-positioned to be able to continue to ship essential products to its key markets in the months ahead.
FY 2020 guidance reaffirmed
Due to Ansell's relatively strong market position in the crisis, it has been able to reaffirm its FY 2020 earnings per share guidance range of between 112 US cents to 122 US cents. Ansell still anticipates being able to provide its FY 2021 guidance as scheduled later this year in August.
Ansell emphasised that it is still maintaining a strong balance sheet, with around $515 million of cash and committed undrawn bank facilities on its books as at the end of February 2020. On another positive note, Ansell further pointed out that it has no significant debt obligations due over the next 12 months, and it continues to maintain a positive operating cash flow position.
