AstraZeneca announced the first increase to its dividend for a decade and an upbeat outlook as the drugs company swung to a fourth-quarter loss driven by higher costs.
The drugs company posted a $636m pretax loss for the three months to the end of December from a $1.49bn profit a year earlier as revenue rose 62% to $12bn. The cost of sales rose to $4.63bn from $1.53bn.
Core earnings rose 56% to $1.67 in the fourth quarter. That figure excludes items related to acquisitions, amortisation of intangibles and restructuring costs.
The company declared a second interim dividend of $1.97 a share, taking the annual payout to $2.87. AstraZeneca said it intended to increase the annualised dividend by $0.10 to $2.90, “reflecting increased confidence in future growth and cash generation”. The increase is the first for 10 years.
Shares of AstraZeneca rose 3.8% to £86.81 at 08:56 GMT and were the biggest gainers in the FTSE 100 index.
AstraZeneca’s Vaxzevria coronavirus vaccine added $1.76bn to fourth-quarter revenue and $3.98bn to income for the full year. AstraZeneca swung to an annual pretax loss of $265m from a $3.92bn profit a year earlier as costs more than doubled to $12.44bn from $5.3bn.
AstraZeneca said it expected revenue to rise by a mid-teens percentage in 2022 and for core earnings per share to increased by a percentage in the mid-to-high 20s. The FTSE 100 group predicted Covid-19 revenue would decline by a percentage in the low-to-mid 20s and that the gross profit margin from Covid-19 sales would be lower than the company average.
The company bought Alexion, a US biotech specialising in rare diseases, in July for $39bn to deepen its focus on immunology and strengthen its position in the US.
Pascal Soriot, AstraZeneca’s chief executive, said: “AstraZeneca continued on its strong growth trajectory in 2021. The positive news from our pipeline, including approvals for Evusheld and Tezspire, supports the outlook for 2022. This, along with the transformative acquisition of Alexion, means that we are confident in our long term growth and profitability. After a landmark year in 2021, we are increasing the dividend for our shareholders.”
AstraZeneca makes one of the leading Covid-19 vaccines, developed with Oxford University, and has also produced a coronavirus prevention treatment, Evusheld. Tezspire, an asthma treatment, was also approved in 2021.
The company has 13 so-called blockbuster medicines. Five of these crossed annual revenue thresholds including Tagrisso, which sold more than $5bn, and Farxiga, which passed the $3bn mark.
Keith Bowman, an analyst at Interactive Investor, said: “Core earnings per share of $1.67 [were] at the upper end of forecasts. Some 22 regulatory drug approvals during 2021 continue to underline its innovation, with a marginal increase in the annual dividend also suggesting long term confidence.”
