Synlab Reports Swing to Net Profit in Q2
By Andrea Figueras
Synlab, the Munich-based provider of laboratory-diagnostic services, has reported a swing to a net profit in the second quarter. This comes as the company's year-earlier results were impacted by an impairment charge. However, the decrease in revenue is attributed to the shrinking contribution from Covid-19 testing.
Strong Q2 Performance
Synlab saw a net profit of €12.1 million ($13.3 million) in the second quarter, compared to a net loss of €94.1 million in the same period last year. The improvement in performance is primarily due to the absence of an impairment charge that was recorded in Germany due to inflationary pressures. Additionally, the company reported a quarterly operating profit of €37.8 million, a significant increase from a loss of €79.7 million.
Decline in Revenue
Despite the positive financial results, Synlab experienced a 15% decline in revenue, which fell to €670.3 million. This decrease can be attributed to the sharp decline in Covid-19 testing sales, which amounted to only €7 million compared to €164 million during the same months in 2022.
Shifting Focus from Covid-19 Testing
Chief Executive Mathieu Floreani stated that the Covid-19-related business has now become a routine activity for Synlab. As a result, the company is nearing completion of its capacity ramp-down for this segment.
Outlook for the Year
Synlab maintains its revenue guidance of around €2.7 billion for the full year. However, the company has revised its Covid-19 testing revenue forecast from €50 million to €40 million. Synlab estimates that its adjusted earnings before interest, taxes, depreciation, and amortisation margin will fall between 16% and 18%.
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