OrbusNeich Medical (6929) H1 2024 earnings summary

Executive summary

• H1 2024 revenue was US$78.910m, down 3.1% YoY reported but up 0.6% excluding FX; profit attributable to owners fell 25.2% to US$18.828m.

• Sales volume was 824,000 units, including 717,000 proprietary units, down 0.2% YoY.

• Adjusted core operating profit, excluding share-based compensation and finance income/costs, fell 33.6% to US$13.6m.

Financial highlights

• Gross profit declined 4.3% to US$55.776m; profit before tax fell to US$21.285m from US$28.029m.

• Operating profit was US$15.871m versus US$24.110m; net finance income rose to US$6.073m from US$4.189m.

• Gross margin was 70.7%, down 0.9 percentage points YoY; net margin was 23.9%, down 7.0 percentage points.

• Basic EPS was 2.28 US cents versus 3.04 cents; diluted EPS was 2.28 cents versus 3.03 cents.

Outlook and guidance

• FX headwinds are expected to persist in H2; Scoreflex volume-based procurement rollout in additional PRC provinces is expected to expand hospital access and support sales.

• Full-year US sales may decline YoY; Scoreflex NC and JADE sales may recover in H2 if Abbott adjusts its sales strategy for insurance changes.

• eucatech AG production and shipments are expected to resume in Q3 2024, with recovery and market integration intended to support H2 sales growth.

• Scoreflex TRIO's PRC NMPA application is expected in Q3 2024; Sapphire 3 US trial enrolment is scheduled to launch in Q3.

• Management expects to maintain a stable dividend policy, supported by operating cash flow and liquidity, and remains optimistic about restoring growth momentum.