One day after CSL suddenly replaced its CEO, the company provided dismal financial figures that helped explain why.
In its half-year report, CSL said its net profit plummeted (PDF) from $2 billion in the second half of 2024 to $384 million in the period from July to December of last year.
The Melbourne, Australia-based company chalked up much of the shortfall to “one-off” restructuring costs of $715 million and asset impairments that totaled a whopping $1.1 billion. The write-offs apply to CSL’s 2026 fiscal year, which ends in June.
“We are clearly not satisfied with our performance and have implemented a number of initiatives to drive stronger growth going forward,” Ken Lim, CSL’s chief financial officer, said in a release. “Our first-half results were also adversely impacted by a number of factors including government policy changes.”
The earnings report came after CSL said that four-year CEO Paul McKenzie was retiring and would be replaced on an interim basis by company veteran Gordon Naylor. The company was blunt in explaining what led to the leadership transition.
“When the board sat down recently and looked at our business and thought about where we need to go in the future, we recognized he didn’t have the skills that we wanted for the future,” Brian McNamee, CSL’s chairman, said on a call with analysts Tuesday, as quoted by Bloomberg.
Since Tuesday, CSL’s share price has tumbled by 12%.
The company has taken heat from investors since its $11.7 billion buyout of kidney disease and iron deficiency specialist Vifor Pharma back in 2021. The acquisition was the largest in CSL history and came at a much higher price than analysts expected. The unit has performed well, however, with sales increasing from $2.06 billion in fiscal 2024 to $2.23 billion in FY 2025. In the most recent reporting period, Vifor’s sales were up 12% to $1.24 billion.
Sustaining the pace will be challenging, however, as the company is now facing generic competition for iron replacement therapy Venofer. A major part of CSL’s impairment for this fiscal year is tied to the drop in expected sales of Venofer. Also accounting for a large chunk of the impairment figure is the declining value of the company’s vaccine technology.
CSL’s vaccine unit, CSL Seqirus, saw a 2% year-over-year sales decline in the previous half-year period. The company expects another vaccine sales slide in the second half of FY 2026 because of pricing headwinds and lower immunization rates in the U.S.
Last year, the company unveiled plans to spin off CSL Seqirus as part of its cost-cutting effort. But, two months later, the company said it was abandoning the plan because of the “heightened volatility” in the U.S. flu vaccine market.
Also struggling is the company’s largest business unit, plasma specialist CSL Behring, with sales down 7% year over year. CSL blamed immunoglobulin sales, which were down 6%, “partly due to Medicare Part D reforms,” the company said in its release. Meanwhile, revenue from albumin was down 27% because of “policy changes in China,” CSL said.
The company still is projecting a 2% to 3% sales increase for the fiscal year, but it will take a significant rebound in the second half to compensate for a 2% overall sales slide in the first half.
CSL has enjoyed a strong decade-plus period of growth, more than tripling its overall revenue from $5 billion in FY 2014 to $15.6 billion in FY 2025. In 2015, CSL acquired Seqirus, which was formerly the flu vaccines business of Novartis.