The CSL Limited (ASX: CSL) share price is currently down 4% after the healthcare giant reported its FY22 result.
CSL is Australia's biggest ASX healthcare share. But, it's a little smaller today in market capitalisation terms as the market didn't respond positively to the company's report and guidance.
The headline number was that its net profit after tax (NPAT) fell 6% to $2.255 billion, using a constant currency comparison. That was despite revenue going up by 3%. In Australian dollar terms, the annual FY22 dividend is up 6% to AU$3.11 per share.
CSL said the performance was "as expected" in a difficult global environment. Nonetheless, it managed to reach the top end of its guidance.
The company reported higher collection costs, and it also significantly grew its investment in research and development. Its growth was limited by FY21 plasma collections being reduced due to the pandemic, which then constrained subsequent sales of core plasma therapies in FY22, due to the long-term nature of its manufacturing cycle.
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Markets are usually forward-looking
Investors are learning about how FY22 went for the company. But they may be paying particular attention to what the company is expecting in FY23, as investors like to 'price in' what's happening next. Is this what's affecting the CSL share price today?
CSL said that as FY22 progressed, its plasma collections grew significantly. Collections were up 24%, which it expects will "underpin strong sales growth" in core plasma products going forward. But, the pandemic put it two years behind the projected growth in plasma collections, which is "suboptimal for patient care".
However, the company warned that the current higher cost of plasma is "also expected to prevail into FY23". But, it predicted that its influenza business, CSL Seqirus, will deliver another strong year driven by demand for its differentiated products. Seqirus saw revenue growth of 13% in FY22.
In FY23, CSL expects net profit after tax for FY23 to be between $2.4 billion and $2.5 billion at constant currency, "returning to strong sustainable growth". This guidance excludes the earnings and costs of Vifor, the recently-acquired business. The company will update guidance to include Vifor when it can.
The idea behind buying Vifor is that CSL will expand its leadership across an "attractive portfolio focused on renal disease and diseases of iron deficiency".
CSL share price snapshot
Since the beginning of 2022, CSL is down by around 2%.
