ASX Health Stocks: Sigma downgrades earnings, and chairman's death at Asian American Medical

The ASX 200 Health Index (XHJ) is down by 1.40% at the time of writing, compared to the broader index which is down by 0.20%.

Sigma Healthcare (ASX:SIG) has updated its earnings guidance for FY22 and investors were not pleased, sending its stock price down by almost 4% this morning.

With 10 months of FY22 complete, Sigma anticipates FY22 underlying EBITDA to be down around 10% versus FY21.

This update reflects a challenging second half according to Sigma, impacted by operational issues resulting from the roll-out of an Enterprise Resource Planning (ERP) system.

The company switched to a live SAP environment in August, but persistent issues have since been compounded further by the protracted COVID-19 impacts.

“A total ERP upgrade is a significant change management program for any company,” said interim CFO, Jeff Sells.

“We have faced additional challenges through the height of COVID-19 restrictions, and unfortunately, this has had some significant impacts on our customers, and we are rectifying these issues as quickly as possible,” he continued.

Sigma said those disruptions have materially impacted sales, and resulted in an unexpected increase in operating costs through the transition.

One-off and non-operating costs are likely to be higher at around $25-$30 million, and as a result, Sigma says net debt will be commensurately impacted.

Sigma Healthcare share price today:

In other ASX health news this morning

Asian American Medical (ASX:AJJ) has sadly announced the death of its 68-year old Executive Chairman, Dato Dr KC Tan, while on a business trip on Hainan Island, China.

The Singapore-based company said Dr Tan had sent his usual “Good morning” greetings to colleagues hours before he passed away between 8.30 am and 9.30 am in his hotel room.

“His death was very sudden and the team is still coming to grips with it,” commented group CFO, Angela Choong.

“Dr Tan was a good boss who was very well respected in his profession. He cared immensely for his patients and worked tirelessly to give them the best care,” she said.

EZZ Life Science Holdings (ASX:EZZ) has appointed former CEO and COO of AusBiotech (Australia’s biotechnology organisation) Glenn Cross as its new chairman and non-executive director, as it continues transformation into a fully integrated life science company.

Cross has more than 40 years’ experience in the life science sector domestically and internationally, including ~20 in senior executive roles.

CardieX Ltd (ASX:CDX) said 92.82% of its unlisted options were exercised into CDX stocks by holders (including directors), suggesting the strong confidence they have in the company.

The conversion has brought a total of $7,666,510 into the company’s coffers.