Cochlear boosts dividend after bounce back
Cochlear investors will see a jump in full-year dividends of close to 60 per cent on last year after the medtech giant returned to profit for 2021 and pledged to emerge from the coronavirus pandemic in a stronger position.
The $17 billion hearing implants maker posted record sales of $1.4 billion for the 12 months to June and managed to spring from its $238 million loss in 2020 to a $327 million net profit for 2021.
Cochlear CEO Dig Howitt. The company confirmed that rescheduled surgeries from COVID-19 shutdowns had helped drive its growth.Credit:Louie Douvis
Cochlear has faced challenging trading conditions over the past 18 months due to elective surgery shutdowns across the globe, which prompted an 80 per cent drop in implant sales in April of last year.
Chief executive Dig Howitt has consistently told investors that patience would be needed to see a bounce back in demand.
On Friday morning the company confirmed that rescheduled surgeries from COVID-19 shutdowns had helped drive its growth, with sales up 6 per cent on the 2019 financial year, which was the last time the business was not affected by COVID-19.
The company’s net profit figure was also helped by a $59 million tax benefit, which was related to the deductibility of payments that Cochlear was forced to make to settle a patent litigation dispute last year.
Cochlear also recorded $31 million in non-cash net gains from its innovation fund, where Cochlear backs other medtech companies. In 2020 the Belgian sleep treatments maker Nyxoah completed a stockmarket listing, while the value of Cochlear’s stake in seizure-tracker EpiMinder increased after a fundraising round.
The company is guiding to 2022 profits of between $265 and $285 million, with “the net profit margin expected to remain a little lower than our longer-term target of 18 per cent”.
That guidance factors in minimal challenges due to coronavirus, but the business said it was not including the possibility of more material disruptions in its forecasts.
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