Ansell upgrades guidance as profit lifts
Chief executive Magnus Nicolin said Ansell is seeing strong growth in its HyFlex range of industrial gloves and its Gammex surgical gloves as the products are upgraded with new materials and combinations of materials made by Ansell.
He also said the company is increasing its presence in the automotive, metal fabrication, and chemical industries, and expects more activity in the oil and gas sector as the industry rebounds from lower commodity prices.
Ansell also has invested heavily in products for the life sciences and pharmaceutical manufacturing sectors. Furthermore, Ansell is gaining more traction in emerging markets in Latin America, the Middle East, South-East Asia, Brazil, Mexico, China, and India.
Ansell now expects full-year earnings per share to come in between US96 cents to $US1.06, ($A1.23 to $A1.37) up from its previous expectation of 91 US cents to $US1.01. The guidance lift relates to its share buyback to date and a lower tax expense following US tax reform, plus underlying business is performing in line with original forecasts. Nicolin said Ansell’s strong balance sheet positions it well for capital management and acquisition activities.
“We see some interesting opportunities in the industrial space related to industrial glove products and body protection, and also in services to help customers figure out what solutions to equip all their workers with,” he said.
On Monday, Ansell reported a net profit of $US428.2 million ($A547.97 million) for the six months to December 31 – up more than 500 per cent – after the company benefited from a $US411.5 million pre-tax gain on the sale of its sexual wellness (condoms) business.
Excluding discontinued operations, Ansell’s net profit was up 23.8 per cent at $US66.6 million. Nicolin said the first half of the financial year had been pivotal for Ansell as the group sold its condoms business and restructured its core healthcare and industrial divisions.
Sales in emerging markets lifted by 12 per cent as safety awareness increased and regulators demanded higher compliance. But the rising price of raw materials such as natural latex and nitrile crimped margins.
However, higher input costs were partly offset by price increases for Ansell’s products, and although input costs were still high they had come off their peak levels. Shares in Ansell were 22 cents, or 0.9 per cent, lower at $24.60 at 1312 AEDT.