Monash IVF returns to profit but warns it faces tougher year ahead after embryo bungles
Fertility giant Monash IVF says profit will fall over the year ahead as it reels from two bungled embryo transfers.
The acting CEO of Monash IVF has told investors that while the company can’t explain the sadness that its shocking embryo mix ups may have caused the patients involved, the “incidents” had a profound impact on the people within the company.
Malik Jainudeen also reiterated that Monash IVF would not publicly release the independent report by Fiona McLeod KC that it had commissioned into the April and June horror bungles, “as the privacy of the patients impacted by the incident is critical, and I have to say that is paramount to looking after the patients impacted”.
“At the same time, as an organisation and me personally, we obviously can’t explain the sadness that this may have caused the patients, and it has obviously had a profound impact on the people within the company.”
He said as a business, “we’ve done a great job to keep (doctors) informed” about it.
“Many, if not all of them are supportive of decisions made by management in terms of how we’re responding to the incidents,” Mr Jainudeen said.
“And, you know, I think engagement with them is all about keeping them informed about things that are happening. You know, every time we have some media noise, we have to manage them the right way.”
He said this goes a long way to ensuring that they’re highly engaged. “Close to the top of the agenda is focusing on our doctors.”
The company also addressed the financial impact of the class action – the largest settlement of its kind – that had at the centre a faulty genetic test. There were more than 700 registered members in the class action filed on their behalf by Margalit Injury Lawyers in December 2020.
The multimillion-dollar payout in August 2024 was inclusive of costs and Monash IVF has made no admission of liability as part of the settlement, which was subject to Supreme Court approval.
On Friday Monash IVF interim chief financial officer Andrew MacLachlan said: “Our operating cash and pre-cash flow were both adversely impacted by payments, made as a result of the class action settlement, which amounted to $39 million net of the insurance proceeds”.
It comes as the fertility giant returned to profit but warned it faces a potential hit to its bottom line from two bungled embryo transfers.
The Melbourne-based company on Friday reported a $25.7m net profit for the year to June.
That was a turnaround from a $5.9m loss it posted in the prior financial year when it had to hand over $56m to settle a negligence class action.
Underlying profit — a measure which strips out the impact of financial one-offs — came in at $27.4m in 2024-25, down 8.1 per cent on the prior year but in line with what the company in May told investors to expect.
Revenue rose 6.7 per cent to $271.9m.
The company also expects its bottom line to come under pressure in the year ahead, with underlying net profit set to range between $20m to $23m in 2025-26.
Mr Jainudeen said they expect this financial year to “be impacted by continued industry weakness and potential impact from the incidents”.
“We are confident about Monash IVF’s growth prospects beyond F26,” he said
The profit report comes two days after Monash IVF refused to publicly release the independent report it commissioned into the two separate embryo mix-ups which saw a woman give birth to a stranger’s baby and another receive the wrong embryo.
Shares in Australia’s only publicly-listed IVF company plunged 25 per cent since April when the Herald Sun revealed a Queensland woman had unknowingly given birth to a stranger’s baby.
The error was only discovered after the baby had been born and the birth parents wanted to transfer their remaining embryos to another provider.
In June shares in the company hit a low of around 60c after Monash IVF revealed another embryo mix-up at its Clayton clinic in Melbourne where the wrong embryo was transferred to a patient who was expecting to carry her same-sex partner’s baby.
It was criticised this week when it said the review by Victorian SC Fiona McLeod was complete but it would not release details to “protect the privacy of affected patients”.
In the announcement Monash IVF briefly outlined its response to the two embryo “incidents” saying it had increased focus on risk management and patient safety.
This included implementing enhanced nursing and laboratory protocols, including additional verification processes and patient confirmation safeguards and electronic witnessing systems.
It will also enhance staff training in the areas of custody and witnessing.
Monash IVF said it had provided copies of the independent review to the Victorian Department of Health and would give a copy to the Queensland Department of Health and Reproductive Technology Accreditation Committee, but would not be releasing it publicly “to protect patient privacy”.
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