Hearing implant maker Cochlear expects profit to be flat in the current financial year as its operating margin comes under pressure.
The company will receive less revenue from foreign exchange hedges in the 2013/14 financial year, and will maintain its spending on research and development, chairman Rick Holliday-Smith says.
“These decisions mean there is some pressure in the short term on the operating margin,” he told shareholders at the company’s annual general meeting in Sydney.
Net profit in 2013/14 is expected to be similar to the previous year’s $132.6 million, with most to be made in the second half of the year, he said.
Cochlear’s interim dividend is expected to be $1.27 per share, compared to $1.25 in the prior corresponding period, Mr Holliday-Smith said.
The final dividend is also expected to be at $1.27, in line with the prior corresponding period.
Shares in Cochlear were down 90.5 cents at $59.005 at 1435 AEDT.
Cochlear’s 2012/13 annual profit was significantly higher than the previous year’s, when Cochlear was hit by costs from a recall of the CI500 series implant.
Chief executive Chris Roberts said Cochlear had invested heavily in research and the development of new products over the last five years, and those new products would start rolling out in earnest in 2013/14.
“There’s more going out this year than in any other year that we’ve ever had,” Dr Roberts said.
“Fiscal 2014 is a year of significant activity that is really going to set the company up for growing momentum in the second half of fiscal 2014, going into fiscal 2015.”
Cochlear has just started to launch its Nucleus 6 sound processor, which the company says is the most advanced and smallest sound processor on the market.
It also expects its emerging range of acoustic implants to make progress in the 2013/14 financial year, following initial sales in 2012/13.