Advanced Bionics released a new electrode array called Hi-Focus Mid-Scala. Click here to download a PDF file to learn more about the electrode array.
Cochlear is facing challenges to continue to manufacture in Australia. The article also mentions that Cochlear has considered bringing in hearing aids to their company to be in a more competitive position. Click here to read the details.
Here is the full article:
BIONIC ear maker Cochlear says it wants to keep manufacturing in Australia, but the government is not making it easy.
Chief executive Chris Roberts has been a critic of federal Labor’s Fair Work laws, which he says threaten Australian jobs.
“That absolutely makes it more difficult for business, and that has already cost jobs in Australia,” he said.
“Jobs have already gone overseas because of those regulations.”
But asked if Cochlear would move manufacturing offshore, Dr Roberts said the Sydney-based company wanted to remain in Australia while holding off on any mergers or acquisitions to help stave off Swiss competition.
“If we drive manufacturing out of Australia, it’s pretty hard for Cochlear to be the only company manufacturing here,” he said.
He downplayed the possibility of moving manufacturing to Thailand, which has a free trade agreement with Australia.
“I don’t believe we’re at that stage yet, but I believe that we do need a better balance towards a healthy business environment,” he told the ABC’s Inside Business yesterday.
Cochlear’s chief competitor, Swiss firm Sonova, has expanded beyond hearing aids into bionic ears with the acquisition in 2009 of US company Advanced Bionics.
To compete, Dr Roberts said Cochlear had considered moving into hearing aids, to complement its existing hearing implants business.
Cochlear is also losing market share in advanced countries due to Advanced Bionics being more competitive. Click here to read more details.
Here is the full article:
INVESTORS have punished market darling Cochlear, dislodging its long-held halo for losing market share to rejuvenated competitor Advanced Bionics in higher-margin, advanced countries.
The stock slumped $7.50, or 9.3 per cent, to $72.96 after chief executive Chris Roberts announced a 3 per cent slide in halfyear profit from $80.1 million to $77.7m.
Dr Roberts described the result as ‘‘pleasing’’, pointing to a 27 per cent increase in implant sales to 13,672 units.
However, analysts saw the volume increase differently, saying it mostly came from lower-margin China, with unit sales in the Americas up only 1 per cent in constant currency terms, and 7 per cent higher in Europe, the Middle East and Africa. Sales in the AsiaPacific region rose strongly, up 33 per cent in constant currency.
Leading healthcare analyst Andrew Goodsall of UBS, who has had a sell recommendation since the voluntary recall of the Nucleus CI500 range in September 2011, said the outlook for Cochlear had changed.
‘‘Cochlear won’t grow the way it has for the last 10 years — the quality of the company and its outlook is no longer the same,’’ Mr Goodsall said.
‘‘There will be some de-rating for Cochlear because it has lost market share in the developed world to Advanced Bionics, which is now in competent hands and aggressively chasing share.’’
Dr Roberts defended the result, and continued to paint an optimistic picture of the group’s prospects.
Asked if the company could continue to grow revenue at its historic rate of 10-15 per cent, he said sales in constant currency terms were 9 per cent higher at $391.7m. Not only that, the market for cochlear implants was still immature. In China, for example, 30,000 profoundly deaf babies were born each year.
‘‘If the market is so huge, perhaps our biggest obstacle is awareness,’’ Dr Roberts said.
He also highlighted that margins had been stable at 28.5 per cent, compared with 28.8 per cent a year earlier.
This was despite the appreciating dollar, the move by Cochlear to roll off its hedge book, increased sales to lower margin China, and a 3 per cent increase in research and development expenditure to $59.9m.
Cochlear enjoyed a clean sheet in the December half-year in relation to product recall costs.
In the corresponding period a year earlier, the group incurred $100.5m of expenses, leading to a bottom line loss of $20.4m. The total cost of the recall was $138.8m before tax, or $101.3m after tax.
This included inventory writedowns, intangible asset impairments, estimated return rates for the affected units, and unit replacement costs.
Dr Roberts said the recalled product would be reintroduced, but he declined to say when.
On acquisitions, he said Cochlear’s strategy was to pursue growth through research and development, not acquisitions, although the company continued to look at opportunities.
The board declared a 40 per cent-franked interim dividend of $1.25 a share, compared with $1.20 previously. Net debt at the end of the calendar year was $72.5m.
Click here for the full interview transcript with Chris Roberts that refers to both articles above about Cochlear.