The impacts of elective surgery pauses across the globe swung Cochlear to a full-year loss in 2020, though capital raises of more than $1 billion gave it a strong foundation to weather the storm.
On Friday it revealed sales had declined one per cent in constant currency terms to $742.8 million, though statutory net profit was up 50 per cent to $236.2 million. Underlying net profit, which excluded one-off payments including government assistance, was down four per cent to $125.3 million.
The company confirmed plans to repay $24.6 million in government assistance related to COVID-19, with $23.1 million of the total from the JobKeeper program.
“Trading conditions since July have improved, and while there is still uncertainty ahead, we consider returning the COVID government assistance the appropriate thing to do,” the company said in a results presentation.
Mr Howitt said there had been a strong rebound in cochlear implant sales across the globe, though developed markets were still well ahead of emerging markets, including China at Latin America.
Sales of units in emerging regions remained down 30 per cent on the same period last year, despite developed regions including the US, Japan and Korea seeing sales up 5 per cent. Mr Howitt said it would take longer for emerging markets to fully return to their pre-COVID levels.
On a call with analysts, he championed Cochlear’s ability to grow market share across the US in this period, arguing that government support and the strong capital base of the business had helped sales staff remain focused on serving clients throughout the pandemic.
“Through COVID, because we were financially secure we could say to our teams their jobs were safe… that has helped us lift share,” he said.
The company’s services revenue, which includes upgrades of hearing processors, saw sales drop by two per cent, however. Chief financial officer Stu Sayers said there had been some slowdown due to fewer in person appointments.
“We saw a significant drop in recipients wanting to come in for their annual check ups,” he said.
Mr Howitt said the company was working towards increasing the payout ratio back to 70 per cent as conditions further improved.