Biosensors' Q4 hit by exceptional items

Singapore

MEDICAL devices company Biosensors International has posted a net loss of US$247.04 million for the three months ended March 31, 2015, reversing the US$6.11 million profit in the year-ago period.

Loss per share was 14.76 US cents for the fourth quarter of FY2015, compared to earnings per share of 0.36 US cent a year ago.

The company said the net loss was the result of several exceptional items recorded in the quarter, including a US$256.1 million one-time non-cash goodwill write-off mainly related to the China business.

"This goodwill was written off as China's annual drug-eluting stents revenue growth rates - which were in high double-digit percentages when Biosensors bought the remaining 50 per cent equity in JW Medical Systems (JWMS) - have since declined over the last few years. While management remains optimistic on the underlying demand in China's healthcare industry, the impairment reflects the lower growth rate that the China operation has recorded in recent quarters," said Biosensors.

For the full year, the company recorded a net loss of US$224.81 million, compared to a profit of US$40.59 million for FY2014.

Total revenue slid 7 per cent year-on-year to US$75.93 million for the quarter, dragged down by lower licensing and royalty revenue and unfavourable foreign exchange impact. Total cost of sales edged up 7 per cent in Q4 to US$20.71 million. Profit from operations dropped 9 per cent to US$16.47 million.

For FY2016, the company said it expects market competition and pricing pressure to stay as headwinds. It added that licensing income from partner Terumo could continue to decrease.

"The currency environment is also expected to remain challenging as the company has concentrated risk with a majority of its revenue coming from non-US dollar denominated regions. Despite these issues, management aims to continue to work towards revenue growth over FY2015. This is expected to be largely driven by revenue growth from BioFreedom™ and Cardiac Diagnostic segment as well as further expansion in Japan and emerging markets," it said.

Jose Calle, Biosensors' CEO, said: "Looking at the revenue, the cardiac diagnostic division and our distribution business in Japan were the best performers during Q4 FY2015. We were also particularly pleased with the improvement in our operating income net of licensing and royalty revenue, which reflects the progress we have made in optimising our cost structure."

Over the longer term, he said the firm will continue to strengthen its competitive position and further penetrate cardiovascular markets worldwide. Biosensors shares closed trading at S$0.80 on Wednesday.