Össur, Reykjavik, Iceland, posted its first quarter (1Q) 2015 financial results.
Net profit decreased 21 percent and amounted to US $9 million or 8 percent of sales, compared to US $11 million or 9 percent of sales in 1Q 2014. Sales were US $114 million compared to US $121 million in 1Q 2014. Bracing and supports sales growth was 3 percent and 3 percent organic, and prosthetics sales growth was 9 percent and 6 percent organic, all measured in local currency (LCY). Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 3 percent and amounted to US $21 million or 18 percent of sales, compared to US $20 million or 17 percent of sales in 1Q 2014. EBITDA increased 12 percent in LCY.
The company said that the strengthening of the U.S. dollar has had a significant impact on reported sales and profits, negatively impacting sales by US $13 million and EBITDA by US $2 million. Further, cash generation in the first quarter of the year is seasonally weak; cash generated by operations was US $7 million or 6 percent of sales, compared to US $12 million or 10 percent of sales in 1Q 2014. Dividends of US $7.5 million, corresponding to about 14 percent of the company’s 2014 net profit, were paid at the end of March. Registration of the company’s share capital reduction of 7,456,755 shares with a nominal value of ISK 1 (about US $0.0077) each was completed on April 15.
“The results of this quarter are in line with our expectations,” said Össur President and CEO Jón Sigurðsson. “We delivered strong operational results with good profitability, despite adverse currency fluctuations and the first quarter being seasonally weak for us. Prosthetics sales growth was excellent across all of our major markets and product lines. Sales growth in bracing and supports was in line with expectations….”
Össur continues to provide the following financial guidance for 2015:
- Total LCY sales growth of 4-6 percent
- Organic LCY sales growth of 3-5 percent
- EBITDA margin in the range of 20-21 percent of sales
- Capital expenditures in the range of 2.5-3.5 percent of sales
- Effective tax rate around 26 percent
