Cochlear reports growing sales, but flat profits

Hearing implant manufacturer Cochlear today reported strong growth in both implant numbers and sales revenues in the first half of the financial year which did not translate into profit growth, despite a boost from revaluing its portfolio of innovation investments.

The Sydney company reported the number of Cochlear implants sold was up 13 per cent to 18,894, driven by acceptance of the Profile Plus series implant (pictured).

While revenue also rose nine per cent to $777.6 million, earnings before interest and tax was flat, up only two per cent to $183.7 million for the half.

Cochlear CEO Dig Howitt explained the company’s rare disappointing profit story due to currency hedging, with foreign exchange contract losses of $21.9 million for the half.

This was offset by a revaluation of Cochlear’s investment in sleep apnea treatment company Nyxoah upwards by $25 million, as reported in @AuManufacturing news.

Cochlear also invested an additional $13 million in Nyxoah which is developing nerve stimulation to treat apnea.

Howitt said: “We have continued to invest in product development and market growth initiatives to drive long-term market growth.

“The balance sheet is strong with cash flow generation sufficient to fund investing activities, capital expenditure and growing dividends to shareholders whilst maintaining conservative gearing levels.”

Capital expenditure was $180 million in the half, including the development of the company’s China manufacturing facility.

The company is predicting the full year net underlying profit will be up by two to nine per cent.

Coronavirus will impact on sales in China, where implant surgeries are already being cancelled because of the virus outbreak.

Picture: Cochlear/Cochlear Profile Plus

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