Chinese lockdowns hit Smith & Nephew

COVID lockdowns in China have hit medical goods maker Smith & Nephew as supply chains are disrupted and surgeries delayed.

The company, which makes artificial knees and hips as well as wound treatments, saw its shares fall 11pc to their lowest price in more than five years after warning that profit margins will be slashed by surging costs.

The company reported a 4pc fall in trading profit for the first half of 2022 and said that its margins will be one percentage point lower for the year, at 17.5pc.

Hospitals around the world have been delaying elective surgeries, cutting sales for suppliers such as Smith & Nephew. Lockdowns have also disrupted supplies from China, restricting the company’s ability to produce its products.

“Growth from Sports Medicine was significantly impacted by the recent

Covid-related lockdowns in China,” the company said.

Deepak Nath, chief executive, said: “Orthopaedics continues to be held back by execution and supply chain challenges.”

The company made a pre-tax profit of £204m in the first six months of the

year, down from £223m a year ago. Sales are expected to grow between 4pc and 5pc in 2022.

Smith & Nephew is one of the FTSE 100’s oldest companies, founded in 1856. It makes prosthetic limbs and orthopaedic implants, as well as other surgical materials.

£204m

The medical goods maker’s pre-tax profit in the first six months of the year, down from £223m a year ago