TOP NEWS: AstraZeneca Profit Falls; Expects Coronavirus To Hurt 2020

(Alliance News) - AstraZeneca PLC on Friday posted a reduced annual profit due to higher costs, ...

Alliance News 14 February, 2020 | 8:04AM
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(Alliance News) - AstraZeneca PLC on Friday posted a reduced annual profit due to higher costs, as well as a reduction in other operating income, and said the Coronavirus outbreak was likely to hurt its 2020 performance.

The FTSE 100-listed drug maker reported that revenue rose 10% to USD24.38 billion from USD22.09 billion, just below consensus of USD24.40 billion.

This 2019 revenue figure included a 12% rise in product sales to USD23.57 billion from USD21.05 billion. At constant currency, product sales were up 15%. Astra had guided for a high single-digit percentage increase in product sales at constant currency, while consensus was for product sales of USD23.63 billion.

The firm recorded a 22% fall in collaboration revenue to USD819 million from USD1.04 billion. This was better than the consensus, which was for collaboration revenue of USD771 million.

Despite this improved revenue, Astra posted a USD1.55 billion pretax profit for 2019, down 22% from USD1.99 billion the year before.

This resulted from a 16% rise in selling, general and administrative costs to USD11.68 billion from USD10.03 billion, as well as a 39% reduction in gains on other operating income and expense to USD1.54 billion from USD2.53 billion.

Core earnings per share rose 1.2% to USD3.50, up from USD3.46, coming in below consensus of USD3.57 and sitting at the bottom of Astra's guidance for core EPS of between USD3.50 and USD3.70 at constant currency.

Core figures exclude amortisation and impairment of intangible assets, restructuring charges and provisions, and other costs.

In 2020, Astra is guiding for "a high single-digit to a low double-digit percentage" rise in total revenue, and "a mid- to high-teens percentage" increase in core EPS at constant currency.

"All guidance assumes an unfavourable impact from China lasting up to a few months as a result of the recent novel coronavirus outbreak. The company will monitor closely the development of the epidemic and anticipates providing an update at the time of the first quarter of 2020 results," said Astra.

The company declared a second USD1.90 per share interim dividend, leaving the total annual dividend unchanged at USD2.80 per share.

Chief Executive Pascal Soriot said: "In the first full year of our return to growth, we made good progress in line with our strategy. Results from our new medicines and Emerging Markets accompanied positive news for patients, most recently including regulatory approvals of Enhertu in breast cancer and Calquence in leukaemia. Our collaborations also progressed at pace, including that with Daiichi Sankyo, while there were several regulatory approvals for new medicines in China at the end of the year, such as Lynparza in first-line ovarian cancer.

"Driven by a strong team, 2020 is anticipated to be another year of progress for AstraZeneca. We are becoming a better-balanced business, both regionally and through our medicines. This transition is a further step towards improving operating leverage and cash generation. As we accelerate our commitments to achieving our long-term climate-change and decarbonisation targets, we will maintain our focus on executing a strategy centred on science and patients."

Astra shares were down 3.6% early on Friday at 7,354.00 pence each, making it the second worst performer in the blue-chip index in London.

By Anna Farley;

Copyright 2020 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
AstraZeneca PLC 7,102.00 GBX -1.58

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