ASPEN Pharmacare Holdings, the local group that sells medicine in about 150 countries, overcame some formidable headwinds to lift normalised headline earnings per share 21 percent to 816.4 cents in the six months to December 31.
Aspen, which this week secured the right to make branded Covid-19 vaccine Aspenovax in South Africa, said yesterday that revenue from continuing operations increased by 4 percent to R19.4 billion.
Normalised headline earnings per share from continuing operations increased by 21 percent to 816.4c. Headline earnings per share from total operations increased by 37 percent to 777.2c.
Normalised earnings before interest tax depreciation and amortisation from continuing operations increased by 10 percent to R5.7bn.
Chief financial officer Sean Capazorio said 2 percent of group turnover in the second half might be affected by the Russian invasion of Ukraine, as Aspen sells mainly thrombosis products to both countries. Sales had stopped in the Ukraine, and while the group policy was to supply medicine on an equitable basis, Aspen might have to comply with medical product sanctions against that country if sanctions were applied, he said.
Group revenue grew 4 percent to R19.4bn with Commercial Pharmaceuticals remaining flat (+5 percent at constant currency basis) and Manufacturing up 19 percent (+30 percent at constant currency basis).
Headwinds from the Covid-19 pandemic had disrupted procurement, supply, logistics, employee productivity and customer demand during the period, said Capazorio.
Aspen’s capabilities were, however, demonstrated through its consistent supply of the Covid-19 vaccines manufactured at its Gqeberha site. The recent conclusion of an agreement with Johnson & Johnson for an Aspenbranded Covid-19 vaccine, Aspenovax, would enable Aspen to make a contribution to improving equitable Covid-19 vaccine access for Africa, the group said.
Net borrowings increased to R19.3bn from R16.3bn at June 30, 2021, due mainly to deferred consideration payments relating to prior year business transactions, a dividend paid to shareholders and the weaker rand exchange closing rate relative to June 30, 2021.
Borrowings had, however, fallen substantially from about R28bn at the same time a year before, he said.
Operating cash flow was in line with expectations and included increased inventory investment by Manufacturing in key input materials to mitigate future supply constraint risk. Capazorio said a strong recovery from Manufacturing was anticipated in the second half after, for example, the impact of Covid-19 on staff attendance at the facilities waned.
Strong cyclical second half cash flows were expected to deliver an operating cash conversion rate above the group target of 100 percent for the financial year. Normalised headline earnings in line with the first half results were anticipated in the second half, provided geopolitical conflicts did not materially impact performance.
edward.west@inl.co.za
BUSINESS REPORT ONLINE