CSL chief executive Paul Perreault has revealed that China has a strong demand of the company's albumin products. The demand has helped the company increase its sales by 35 percent. Perault said that the blood products and vaccines supplier would probably reach US$600 million (AU$781 million) sales in China in 2017.
"It has become a big business. We'll be approaching probably US$600 million (AU$781 million) or so in sales in China this year. And that's on the back of one product, so there is potential for the future in China if we can figure out a way to participate more fully," Perreault said.
The company has increased its net profit by 12 percent at US$805.5 million (AU$1.49 billion). The increase covered the sales in six months to December 2016. The profit mainly came from the immunoglobulins and specialty products sales. The result was ahead of its guidance in January 2017 with a net profit of US$800 million (AU$1.42 billion).
The company benefited from supply constraints of China that led to the surging of immunoglobulins sales by 22 percent. The plasma products industry of China could not supply enough albumin for its population. CSL's albumins revenue has increased by 19 percent while the specialty products gained 25 percent. The earnings share reached US$1.77 (AU$2.31) per share.
"The one-off market conditions arising from competitor supply constraints in the first half are expected to normalise in the second half. We will keep some, we will lose some, but some will stick with us," Perreault said. He said that immunoglobulins and albumin sales would remain strong.
CSL's reported earnings per share (EPS) grew up to 14 percent. Its underlying EPS grew up to 39 percent at CC. Its interim dividend increased to US$0.6 (AU$0.78) per share.
However, Perreault pointed out that the company faced challenges with its flu vaccine businesses. Seqirus as well as acquired Novartis flu vaccines businesses was expecting a loss in the previous financial year. In the next financial year, the company was only expecting to reach break even. A new product was expected to be released or gain traction in 2017.
"Flu (vaccines) is really not for the faint of heart. It's a tough, hand-to-hand combat endeavour when you're dealing with companies like Sanofi and GSK (GlaxoSmithKline)," Perreault said.
He said that they were in a very competitive space. He said that they were battling with the high dose product of the competitors. But he pointed that the company needed a step change in efficiency.