The CSL Ltd (ASX: CSL) share price is under the spotlight after reporting its FY25 half-year result.
CSL is a large biotechnology business, with a presence in blood plasma products, vaccines and more.
CSL HY25 result
Here are some of the main highlights for the six months to 31 December 2024, with some numbers expressed at constant currency (CC) as though foreign currency rates hadn’t changed during the period:
- Revenue up 5% to $8.48 billion at CC
- Underlying net profit rose 3% to $2.07 billion
- Underlying net profit increased 5% to $2.11 billion at CC
- Statutory net profit after tax (NPAT) grew 6% to $2.01 billion
- Statutory NPAT grew 7% to $2.04 billion at CC
- Interim dividend increased 16% to A$2.08 per share
Division breakdown
The healthcare giant said there was strong demand for many of its market-leading therapies, which translated into sales growth, particularly in its core Ig business.
CSL Behring sales increased 10% to $5.74 billion, with immunoglobulin sales up 15% to $3.1 billion, albumin sales up 9% to $672 million, haemophilia sales up 11% to $731 million and specialty products saw sales decline 5% to $921 million. I think this segment is key for the CSL share price.
CSL said it continues to advance key initiatives to improve its gross profit margin, which is going according to plan.
The healthcare company said its Seqirus (vaccine) business was negatively impacted by significantly low influenza immunisation rates, particularly in the US. Seqirus revenue dropped 9% to $1.66 billion.
CSL reported Vifor grew sales by 6% to $1.08 billion, helped by “robust” iron volumes in Europe and the expansion of its nephrology products.
The company said its plasma collections continue to grow with the cost of collections decreasing. The rollout of the RIKA plasmapheresis devices in the US is well advanced and on track to complete by June 2025. CSL said the individualised nomogram has been implemented and is reportedly delivering the planned benefits.
Research and development
R&D is a key part of CSL’s operations because it allows the company to create the next healthcare products for the coming years.
CSL reported research and development expenses were $646 million, down 4% compared to the prior comparable period. The decrease reflects the ending of several R&D programs.
R&D expenses are expected to be approximately 10% of revenue for FY25.
Outlook for the CSL share price
Management said its underlying business units are “robust” and it’s in a strong position to deliver annualised double-digit earnings growth over the medium-term.
In FY25, it’s expecting revenue growth to be between 5% to 7% during FY24 at CC.
CSL’s underlying net profit (NPATA) for FY25 is expected to be between $3.2 billion to $3.3 billion at CC, suggesting growth of between 10% to 13%.
Behring is focused on improving the gross profit margin, Seqirus’ market conditions remain challenged and for Vifor, the iron ore market remains strong.
I think CSL is an impressive business, and it’s good to see the company is still growing. With political changes in the US related to healthcare, I’m not sure if CSL shares are a buy, even at this lower price. The US is a big part of its earnings foundations. But, CSL is close to a 52-week low.
For me, there are other ASX growth shares that are more appealing.
