Smith & Nephew revenues to drop as more procedures postponed

Medical technology company Smith & Nephew said on Monday that it expects to report a 7% decline in fourth-quarter underlying revenue and a 12% drop in full-year revenues, as more medical procedures are postponed due to rising numbers of coronavirus infections.

The company, which makes hip and knee replacements, said sales were dented by increased rates of Covid-19 infections from mid-October onwards, particularly in the US and Europe, where more procedures were postponed following the reintroduction of restrictions.

The impact was most pronounced in its Orthopaedic Reconstruction, Sports Medicine and ENT businesses, driven by lower levels of elective surgery. The company’s Advanced Wound Management and Trauma businesses remained more resilient, however.

As previously stated, the trading profit margin will be "substantially" lower on the year, with negative operating leverage due to lower volumes partially offset by cost control measures.