Aspen’s CEO Stephen Saad said the ‘robust’ results were supported by improved operating margins underpinned by lower operating expenses and a strong balance sheet. Picture: File
Aspen Pharmacare Holdings (APN), a global multinational specialty pharmaceutical company, uplifted headline earnings per share 24 percent to 1 627.6 cents in the year to June 30 and has signed a landmark agreement to boost vaccine capability on the continent.
CEO Stephen Saad said the “robust” results were supported by improved operating margins underpinned by lower operating expenses and a strong balance sheet.
The dividend increased by 24 percent to 326 cents per ordinary share from 262 cents.
Revenue from continuing operations increased by 2 percent (+5 percent in constant exchange rate) to R38.6 billion.
Headline earnings per share from total operations increased 31 percent to 1 461.2 cents.
Aspen has signed a 10-year agreement with the world’s largest vaccine producer, Serum Institute of India.
Saad said the agreement was to manufacture, market and distribute four Aspen-branded routine vaccines in Africa. In the past year, revenue of R1.4bn in its Manufacturing division came from the fill and finish production of the Johnson & Johnson Covid vaccine at the Gqeberha sterile manufacturing facility
In responding to the Covid-19 pandemic, Aspen had invested billions to establish a world class steriles manufacturing capability, demonstrating its ability to partner successfully to deliver millions of doses of vaccine to the highest standard.
“Through this agreement, the partners are responding to the African Union’s call for more African vaccine manufacturing on the continent. Enhancing access to medicines is at the forefront of Aspen’s ESG strategy, ” said Saad.
He said declining demand from Johnson & Johnson will have an unfavourable impact on Manufacturing performance in the 2023 year, unless substituted by orders for Aspenovax. Other long-term contracts and commercial manufacturing opportunities would only be realised from financial year 2024 onwards.
Group borrowings reduced to R16.1bn from R16.3bn, ensuring the leverage ratio remained comfortably below target levels. This allowed the funding of a share buy-back of 2.2 percent of issued shares.
Group revenue grew 2 percent to R38.61bn. Gross profit growth of 3 percent slightly exceeded revenue growth, with the underlying segmental gross margins all showing improvement.
Commercial Pharmaceuticals, comprising of Regional Brands and Sterile Focus Brands, saw underlying volume growth of 4 percent and was impacted by certain product divestments in South Africa, challenges faced by the China business, including volume-based procurement and Covid-19 related lockdowns, as well as the impact of the Russia and Ukraine conflicts in the group’s businesses there.
In Regional Brands, supply constraints and product portfolio divestments impacted the performance of Africa Middle East.
In the Sterile Focus Brands revenue fell 2 percent to R10.25 billion due to lower sales in Russia during the second half and the challenges in China.
Manufacturing revenue increased 18 percent to R10.95bn with significant growth in finished dose form sales. This growth was partly diluted by the Chemicals business. Manufacturing enjoyed a strong second half recovery.
Several other potential long-term opportunities were being explored with various multinational partners and Aspen hopes to secure these by the end of the 2023 financial year.
edward.west@inl.co.za
BUSINESS REPORT