OrbusNeich Medical (6929) H1 2023 earnings summary

Executive summary

• H1 revenue was US$81.410m, up 18.2% YoY; sales volume rose 20.8% to ~725,000 units. Excluding FX, revenue growth was 23.5%.

• Profit attributable to owners increased 213.3% to US$25.2m; adjusted profit rose 105.6% to US$25.4m.

• Core operating profit rose 52.1% to US$20.4m, supported by higher sales volume, stronger gross margin and interest income.

Financial highlights

• Gross profit increased 22.1% to US$58.270m; profit before tax rose 189.3% to US$28.029m from US$9.689m.

• Basic EPS was US3.04 cents versus US1.39 cents; diluted EPS was US3.03 cents versus US1.20 cents.

• Net finance income was US$4.2m versus net finance costs of US$1.2m, reflecting higher fixed-deposit interest and no preferred-share unwinding interest in H1 2023.

• Selling and distribution expenses rose 17.2% to US$19.3m; G&A fell 11.2% to US$9.5m as listing expenses did not recur; R&D expense rose 2.2% to US$6.9m.

Outlook and guidance

• Management expects steady H2 revenue and net profit growth through market expansion, deeper Abbott distribution collaboration and operating efficiency; the US is expected to be a key growth driver.

• Planned PRC mix expansion emphasizes non-volume-based procurement products, microcatheters and peripheral products.

• OAS distribution in certain APAC and EMEA markets ends December 31, 2023; with 3.3% of H1 revenue, the expected revenue and profit impact is limited.

• Sapphire Ultra and Sapphire Ultra NC were expected to receive FDA approval by year-end 2023; Fuyang facility construction was planned to start by year-end, subject to permits.

• No interim dividend was recommended; the Board will consider a final dividend in light of positive operating cash flow and the strong financial position.