Cochlear H1 net profit jumps 22%

Cochlear Ltd, the world's leading maker of hearing implants, has upgraded its
earnings guidance after posting a 22 per cent lift in interim net profit.
The increase was due to currency gains and strong sales in the Americas and Europe,
which helped offset sluggish demand for services in Asia.
The Sydney-based company said it now expects a lift in core earnings of between 15
per cent and 20 per cent for the year to June 30.
The group had previously said it expected between 10 per cent and 20 per cent growth
in earnings for 2008/09.
Chief executive Dr Chris Roberts said the global financial crisis had so far had a
relatively minor effect on its clients.
"These are definitely times of uncertainty. We don't know what is going to happen as
we go forward," Dr Roberts said on a conference call.
"That said, we don't see a major impact of the global financial crisis on our
customers."
A Cochlear device provides hearing to a person who is profoundly deaf through a
surgical implant.
Cochlear, which generates more than 90 per cent of sales in overseas currencies,
reported a net profit of $69.9 million in the six months ended December 31, up 22
per cent from $57.1 million on the prior corresponding half.
Core earnings lifted 20 per cent to $74.4 million.
Cochlear's sales were up 22 per cent to $346.9 million, or up 12 per cent in
constant currency terms.
"On the one hand, the depreciation of the Australian dollar helped us," Dr Roberts
said.
"But if you strip out that foreign currency tail wind, our sales in constant
currency terms were still up a healthy 12 per cent."
Cochlear booked $12.8 million in gains as the US dollar and euro strengthened
against the Australian dollar.
Cochlear sold 9,178 Cochlear implants in the half, up two per cent.
Dr Roberts said the Asia Pacific region was the weakest region in the half due to
the lack of donation sales to China.
Cochlear did not make any donation sales to China in the half, compared to 180 in
the previous corresponding period.
The company won a contract in 2006 to supply around 15,000 implant systems over six
to eight years to a Taipei-based health organisation offering to donate them to the
profoundly deaf in China.
Dr Roberts said that donation sales have been hampered by administrative procedures
in China, resulting in distributors reducing orders.
Dr Roberts said in the global economic environment people were reducing stock.
"In this time of economic uncertainty definitely people have managed their stock
down," he said.
Cochlear declared a fully franked half year dividend of 80 cents per share, up 14
per cent on the previous corresponding period.
Cochlear shares lifted $2.30, or 4.36 per cent, to close at $55.00 on Tuesday.