Europe News

Roche maintains 2020 outlook as first-half sales, profit fall

Key Points
  • Sales are still seen growing in the low- to mid-single-digit percentage range at constant exchange rates.
  • Core earnings per share are targeted to grow broadly in line with sales, and the company expects to increase its dividend.
A photo showing the logo of Swiss pharmaceutical giant Roche in Basel.
SEBASTIEN BOZON | AFP | Getty Images

Roche said on Thursday that first-half sales and profit fell as patients cut down on trips to hospital amid the Covid-19 pandemic although the Swiss drugmaker maintained its full-year outlook.

Net income fell 5% to 8.5 billion Swiss francs ($9.16 billion) from 8.9 billion francs in 2019, as the strong Swiss franc also impacted results. Sales slipped 4% to 29.3 billion francs from 30.5 billion francs. At constant exchange rates, profit rose 3% and sales rose 1%, Roche said.

Sales are still seen growing in the low- to mid-single-digit percentage range at constant exchange rates. Core earnings per share are targeted to grow broadly in line with sales, and the company expects to increase its dividend.

Hospitalisations and out-patient visits decreased during the period, hitting sales of multiple sclerosis drug Ocrevus, haemophilia treatment Hemlibra, eye drug Lucentis and blood cancer treatment Rituxan.

Rival Novartis this week reported similar declines related to patients staying away from the doctor as it trimmed its sales outlook, which had been more optimistic than Roche's to start the year.

And while Roche did benefit from increased sales of diagnostic tests for Covid-19, routine testing decreased significantly due to a decline in regular health checks.

CEO Severin Schwan told CNBC Thursday that the company had mostly seen consistently modest growth, but a "strong decline" in sales in May weighed on earnings.

"This was at the height of the lockdowns when many hospitals literally closed down except for Covid-19 patients, and that has impacted our sales," he told CNBC's "Squawk Box Europe."

"The good news is that since June and now also into July, hospitals have opened again, patients are returning to hospitals and we see our sales recovering, and that is the reason why we also confirmed our initial outlook and guidance for the full year."