Trinity Biotech records 63% drop in pretax profit

Pretax profits fell 63 per cent at diagnostics group Trinity Biotech in the first three months to the end of March 2017 compared with the same period a year earlier. Profits before tax of $315,000 (€288,970) were recorded for the quarter.

Meanwhile, operating profit at the firm was $1.3 million, also down on the previous year by 27 per cent.

According to a statement from the company, the drop in operating profit is attributable to the combined impact of the lower gross margin and slightly higher indirect costs.

In recent months the company had culled products whose sales had been declining, including its Microtrak product range. The company suggests that the decrease in margins was partly due to lower production levels after that cull.

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The Bray-based and Nasdaq-listed company reported earnings before interest, taxes, depreciation and amortisation of $2.7 million (€2.4m). Cost of sales at the firm only recorded a slight increase of 0.085 per cent to $23.5 million (€21.6m).

Normal levels

Commenting on the results, Kevin Tansley, chief financial officer, said "margins have started to rebound towards more normal levels, and this will continue with revenue growth in the future, whilst indirect costs are being kept under control".

Revenues in the point-of-care division of the company increased $0.7 million compared to the first quarter in 2016. The company attributes this to higher HIV sales in Africa.

However, clinical laboratory revenues decreased by 3.6 per cent to $19.5 million (€17.9m) due to the impact of culling a range of older declining products at the end of 2016, according to a statement.

“Quarter 1 typically represents our lowest revenue quarter, and we believe that future profitability growth can be achieved by concentrating on growing our key business lines with a particular emphasis on diabetes, autoimmunity and HIV,” said Ronan O’Caoimh, chief executive of Trinity Biotech.

Buyback

During the quarter the company repurchased 181,000 shares at an average price of $6.40 and with a total value of $1.2 million. A further 134,000 American depository receipts (ADRs) have been repurchased since the end of the quarter at an average price of $5.63.

That brings the total purchased since the beginning of the buyback programme to over 1.4 million shares with a total value of $11.9 million (€10.9m).

The share buyback programme will continue, according to Mr O’Caoimh.