The Healius Ltd (ASX: HLS) share price has fallen lower today by 5% following a business update in light of recent market developments surrounding the coronavirus crisis.
FY 2020 earnings guidance withdrawn
This morning, Healius announced that to date, it has performed financially in line with its previous guidance for the 2020 financial year. However, the company does acknowledge that the vast number of national developments that have occurred during the past five days have now had an impact on its daily activities.
Combined with the growing uncertainty that Australia's economy and business sector face in the months ahead, Healius noted that it has decided to withdraw its financial guidance for FY 2020.
Role in the coronavirus pandemic
Healius commented that it will play its part in the fight against the coronavirus through its collection centres geared for coronavirus testing as well its diagnostic testing facilities, GP isolations rooms and telehealth services for remote patients. All of Healius' services are being co-ordinated with the public health system.
Strong demand for coronavirus testing but a decline in routine services
The healthcare company commented that it has witnessed strong recent demand for coronavirus testing and is currently performing around 2,500 coronavirus tests per day in its laboratories. Demand is only likely to continue in Australia in the months ahead, in tandem with Australia's flu season which will also require vaccinations and increased primary care.
Healius could also benefit from the government decision today to expand access to all Australians for Medicare-funded telehealth services.
However, on the flip-side, Healius has witnessed a decline in demand for a number of its routine and non-critical services, as some people stay away from healthcare centres for these types of activities. The company is also experiencing an increase in consumable expenses.
Contingency measures to be activated
Some of the contingency business plans that Healius is activating to counteract any reduced demand for some of its services includes reviewing all non-critical activity as well as reducing its cost base.
The company is also considering moving some of its staff from non-critical activities to frontline roles in the fight against the coronavirus. Additionally, Helius will potentially ramp up its GP telehealth services as it now appears quite likely that further isolation measures will be needed to be put in place by the government in some sectors.
Healius believes it remains well-positioned for long term growth. In Healius' first-half FY20 results, the company reported revenue of $945.1 million, up from $878.9 million in the prior corresponding period.
Commenting on recent developments, Healius Managing Director and CEO, Dr Malcolm Parmenter, said: "Although there is a high degree of uncertainty regarding the short to medium term financial impact of COVID-19, without doubt we expect to see strong demand over time in all aspects of the business, as our businesses enjoy good market positions and deliver critical largely non-discretionary services at scale."
