Cochlear Limited releases strong half-year financial results

Cochlear Limited (ASX: $COH) has released its Appendix 4D and FY24 Half Year Financial Report for the period ended 31 December 2023. The report shows a 25% increase in sales revenue to $1,113 million, driven by strong growth in cochlear implants and sound processor upgrades. The company's gross margin was 74%, slightly below the 75% target, and the underlying net profit increased by 35% to $192 million. Cochlear also announced an interim dividend of $2.00 per share, representing a 29% increase on the previous year.

Executive Commentary on FY24 Half Year Financial Report

We are pleased with the strong performance in the first half of FY24, with a 25% increase in sales revenue driven by robust growth in cochlear implants and sound processor upgrades. Our gross margin was slightly below the target at 74%, primarily due to inventory write-downs and the commencement of production at Chengdu. However, the underlying net profit increased by 35% to $192 million, reflecting the company's resilience and growth. We remain confident in the opportunity to grow our markets and have raised our FY24 profit guidance to $385-400 million, representing a 26-31% increase on FY23. This increase is driven by a combination of revenue growth and improved net profit margin. We expect strong trading conditions to continue in the second half, particularly in cochlear implant units and sound processor upgrades. Our investment in R&D and market growth activities remains strong, with an anticipated investment of around 12% of sales revenue in R&D. We are well positioned to create value for our stakeholders now and over the long term.

Summary of FY24 Half Year Financial Report and Outlook

Cochlear Limited has reported a strong performance in the first half of FY24, with a 25% increase in sales revenue driven by growth in cochlear implants and sound processor upgrades. The company's gross margin was slightly below the target at 74%, and the underlying net profit increased by 35% to $192 million. Cochlear has raised its FY24 profit guidance to $385-400 million, reflecting confidence in continued strong trading conditions and growth opportunities. The company's investment in R&D and market growth activities remains robust, and it maintains a strong balance sheet with net cash of $485 million. Additionally, the proposed acquisition of Oticon Medical is expected to further contribute to the company's growth. Overall, Cochlear is well positioned to deliver value for its stakeholders in the short and long term.