Roche raises profit outlook after dynamic first half-year
Published: Thursday, Jul 25th 2024, 08:10
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The pharmaceutical company Roche can look back on a solid first half-year. Business is going so well that the Group is now raising its profit outlook for the year as a whole.
As Roche announced on Thursday, Group sales were on a par with the previous year at 29.8 billion Swiss francs. At constant exchange rates, however, it rose by 5 percent. And excluding the Covid-19 acquisitions, sales would have increased by as much as 8 percent. The second quarter in particular showed accelerated growth momentum with an increase of 9% at constant exchange rates.
In the first six months of the year, the important pharmaceutical division achieved sales of 22.6 billion Swiss francs, an increase of 1 percent. Business was driven by a sustained high demand for newer medicines. The eye medication Vabysmo in particular once again proved to be the most important growth driver.
Roche generated sales of 7.2 billion (-1%) with its diagnostics. This smaller division in particular had seen a real boom in coronavirus times due to the tests.
The bottom line was a consolidated profit according to IFRS of 6.7 billion, down 11% on the same period last year. The decline was due in particular to the impairment of intangible assets for products and technologies in research and development as a result of strategic decisions.
Core operating profit, on the other hand, which is the main focus of analysts, rose by 4 percent to 11.3 billion. Roche attributes the increase to the sales trend and its cost management.
Better than expected
With the reported figures, Roche slightly exceeded the average analysts' estimates.
Based on the half-year results, the pharmaceutical company is raising its previous profit outlook for the year as a whole. Core earnings per share are now expected to increase in the high single-digit percentage range (previously: mid single-digit percentage range). Management continues to expect a mid-single-digit percentage increase in sales at constant exchange rates. As always, the Group aims to increase the dividend in Swiss francs
In view of the expected impact from the discontinuation of Covid sales, Roche continues to expect a negative impact on sales of 1.1 billion francs. By contrast, the erosion of sales due to copycat products is likely to have a somewhat less severe impact. Roche has adjusted its forecast here to -1.4 billion. Most recently, the Group was still forecasting 1.6 billion.
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