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UPDATE 1-Coloplast's full-year result drops 62 pct on lawsuits costs
November 3, 2015 / 12:17 PM / 2 years ago

UPDATE 1-Coloplast's full-year result drops 62 pct on lawsuits costs

(Adds CEO comment, analyst, share price)

COPENHAGEN, Nov 3 (Reuters) - Danish healthcare products maker Coloplast saw fourth-quarter operating profit before taxes swing into a loss and its full-year results fall 62 percent after it set aside 3 billion Danish crowns ($445 million) for U.S. lawsuits.

Coloplast had already booked costs of 1.5 billion crowns in the previous financial year for the legal cases, which relate to product liability regarding transvaginal surgical mesh products.

On Sept. 14, Judge Joseph Goodwin in the Southern District of the U.S. state of West Virginia ordered Coloplast to make substantial progress in the settlement process and to enter into discovery phase of litigation with 200 cases, Coloplast said.

“There is an increased probability that certain cases will proceed to trial,” it said in its earnings statement.

Coloplast said earnings before interest and tax (EBIT) were -1.75 billion Danish crowns (-$258 million) in July-September, better than a forecast of -1.83 billion crowns in a Reuters Poll, prompting its shares to jump.

For the full year, operating profit fell to 1.54 billion crowns, compared with the 3.15 billion crowns the company earned in the previous financial year.

“We’ve closed a difficult and challenging year with a good Q4 performance and, overall, satisfactory full-year results,” Chief Executive Lars Rasmussen said.

The company proposed a dividend payment of 11.5 crowns per share and said it expected revenue growth of 8-9 percent in Danish crowns. EBIT margin is expected to be 33 to 34 percent in the fiscal year of 2015/16.

“The EBIT guidance is better than expected. It compensates for a more cautious topline growth rate,” analyst Michael Friis Jorgensen from Alm. Brand Markets wrote in a note to clients.

By 1125 shares in Coloplast were up 5.3 percent while the Copenhagen main index was up 0.3 percent.

$1 = 6.7950 Danish crowns Reporting by Ole Mikkelsen; Editing by Mark Heinrich

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