Lonza announced $2.17 billion share buyback
2023.01.25 03:19
Lonza announced $2.17 billion share buyback
By Kristina Sobol
Budrigannews.com – Despite the anticipated decrease in annual margins, Lonza, the Swiss drug contract manufacturer, backed its growth prospects for the near future and announced on Wednesday that it would buy back shares worth 2 billion Swiss francs ($2.17 billion).
Due to the waning impact of COVID-19 vaccine manufacturing services in the previous year, Lonza anticipates that its core earnings before interest, depreciation, and amortization (EBITDA) margin in 2023 will fall between 30% and 31%, down from 32.1 percent in 2022.
However, the company with headquarters in Basel announced a 17% increase in its annual dividend and reiterated its target of 33%-35% margins by 2024.
In a statement, chief executive Pierre-Alain Ruffieux stated, “We are also pleased to confirm our Mid-Term Guidance 2024, supported by new capacity coming online and robust industry fundamentals.”
In addition, the company reported a nearly 20% increase in core 2022 EBITDA of 2.0 billion Swiss francs, slightly exceeding market expectations, as part of a multi-year investment push to assist drug developers betting on new therapeutic proteins and cell and gene therapies.
According to Lonza, the company’s financial buffer was sufficient for the construction of new plants, the pursuit of bolt-on takeover opportunities, and the distribution of cash among shareholders due to its net cash position of 186 million francs.
Higher energy costs, expensive domestic production as a result of the Swiss franc’s recent rise in value, and a decrease in income from producing COVID-19 vaccines for Moderna (NASDAQ:) have all sparked concerns among some analysts.
Adjusted for currency fluctuations, the Swiss company predicted sales growth in the “high single digits,” which was lower than the 15.1% increase it experienced last year.
