COCHLEAR R&D INVESTMENT DRIVES NEW PRODUCTS AND BOOSTS PROFIT AND REVENUE
Written on the 17 August 2017 by Ben Hall
COCHLEAR (ASX: COH) has boosted its 2017 full year net profit by 18 percent to $223.6 million and has forecast further double-digit growth for FY18 as it rolls out a range of new products.
The world's biggest hearing implant maker grew its sales revenue by seven per cent to $1.2 billion, while earnings before interest and tax rose 20 per cent to $315.6 million, up from $262.6 million in the previous financial year.
"Cochlear continues to demonstrate its commitment to being the technology leader in our industry with ongoing investment in research and development," says Cochlear CEO Chris Smith (pictured).
"During the year we invested $152 million, or 12 per cent of sales revenue, in R&D with a pipeline of new products expected to be launched over the coming years."
One of its new products which is expected to drive further growth is a processor, called the Nucleus 7 Sound Processor, which allows users to stream sound directly from an iPhone and iPad.
"We expect the launch of the Nucleus 7 Sound Processor, which commences its full market release from September, to contribute to both implant growth and upgrade demand over the coming years," says Cochlear president Dig Howitt, who takes over as CEO from Chris Smith in January.
However, Howitt warned that the strengthening Australian dollar will have an impact on earnings and is likely to reduce underlying net profit growth by a few per cent in FY18.
Cochlear, which developed the world's first hearing implant in the 1970's, has also launched its first off-the-ear sound processor called Kanso in the US and Europe. It's a product which is more discreet than over-the-ear devices and has delivered strong sales.
Cochlear declared a final dividend of $1.40, fully franked, bringing its total dividend to $2.70, up from $2.30 in the prior corresponding year.
On Thursday, COH shares rose more than eight per cent and were trading at $154.42 at around 1.30pm (AEST).
Business News Australia
Author: Ben Hall