2 days ago
- Business
- New Straits Times
CSL to cut workforce, spin off flu vaccine arm; shares tumble
KUALA LUMPUR: Australian biotech firm CSL said on Tuesday it would spin off its influenza vaccine division and would cut up to 15 per cent of its workforce as part of a strategic overhaul, sending its shares tumbling 11 per cent.
It is also targeting annualised savings of up to US$550 million over the next three years and plans to book a one-off pre-tax charge of up to US$770 million in the current financial year.
"The transformational initiatives we are announcing today will further reshape and simplify the business, provide a platform to renew CSL's focus on our core strengths," CEO Paul McKenzie said in a statement.
The strategic overhaul was announced in tandem with earnings, with CSL reporting a 14 per cent rise in underlying profit for the year ended June to US$3.3 billion on a constant currency basis, driven by a strong performance from its blood plasma business, CSL Behring.
It aims to spin off the flu vaccine unit, CSL Seqirus, into a separately listed entity in Australia by next June, as lower U.S. immunisation rates and potential US tariffs on pharmaceuticals cloud the division's outlook.
Craig Sidney, a senior investment advisor at Shaw and Partners, said the spin-off "could actually unlock some value and that may well be positive."
But CSL, which employs some 29,900 people, saw its stock tumble to its lowest in five weeks, making it the worst performer in the ASX200 benchmark index, which traded 0.6 per cent lower.
"Cutting back staff is normally a positive thing, but I suspect that it will have an impact on earnings growth and that's what the market seems to be focused on at the moment," Sidney said.
CSL also said it will resume its share buyback program, starting with A$750 million (US$486 million) this financial year.
CSL Behring's fiscal 2025 revenue grew 6 per cent to US$11.16 billion, with demand for its core plasma therapies expected to remain robust in 2026.
That underpinned CSL's forecast of underlying annual earnings of between US$3.45 billion and US$3.55 billion on a constant currency basis, though the midpoint of the range fell short of the Visible Alpha consensus of US$3.56 billion.
CSL, founded more than a century ago as a government laboratory, declared a final dividend of US$1.62 per share, up from US$1.45 per share declared a year ago.
