Smith and Nephew swings to a loss as sales decline during lockdown
Medical device maker Smith and Nephew reported a huge drop in revenue as leading to a loss before tax of $34m.
The figures
Smith and Nephew reported an 18.7 per cent drop in revenue in the first half of the year, leading to a loss before tax of $34m (£26.2m).
It also reported an operating loss of $5m from a profit of $419m a year earlier. Its operating loss margin was minus 0.2 per cent for the year to the end of June, compared to 16.9 per cent in the same period last year.
The firm said it had cut costs by around $150m in the first half of the year, out of its programme to deliver up to $200m in 2020.
Why it’s interesting
The medical equipment maker said it was in line with expectations but said it had been hit by the government’s coronavirus restrictions. Performance did improve in the second quarter as elective surgeries restarted.
Revenue declined by approximately 47 per cent in April, and 27 per cent and 12 per cent in May and June respectively.
Smith and Nephew said the drop in operating and trading profit margin had been a result of the pandemic, which hi gross margins.
What Smith and Nephew said
Chief executive Roland Diggelmann said: “We have taken measures to ensure the Group emerges from this crisis as strongly as possible. These include maintaining our R&D investment, launching new products, protecting jobs, and managing our cost base.”
“There remain many uncertainties as countries continue to battle COVID-19, but with our unique portfolio, proven strategy, strong balance sheet and motivated workforce we are ready to take advantage as markets recover.“