Aspen’s comparable revenue increases by 12% to R35.4 billion Johannesburg – JSE Limited listed Aspen Pharmacare Holdings Limited (APN), a leading pharmaceutical company in the southern hemisphere, has announced positive results for the year ended 30 June 2016 notwithstanding economic pressures and currency weaknesses. Stephen Saad, Aspen Group Chief Executive said, “The positive results underpin the strong foundation set which the business will build on in the 2017 financial year. The recent transactions, with a focus on anaesthetics which has been identified as a key therapeutic category for the Group’s strategic development plans, will further strengthen Aspen’s presence in the hospital sector. The International business remained the largest contributor to Group revenue and delivered strong comparable revenue growth. Manufacturing revenue from South Africa’s Active Pharmaceutical Ingredients (“APIs”) and finished dose forms showed pleasing growth of 52% and 69% respectively. Asia Pacific recorded a 11% comparable revenue increase to R7,4 billion, with Japan leading Asia’s 29% increase in sales. Gross revenue in sub-Saharan Africa increased 18% to R3,3 billion.” GROUP PERFORMANCE Comparable revenue increased by 12% to R35.4 billion. Comparable normalised operating profit before amortisation, adjusted for specific non-trading items improved by 9% to R9.4 billion. Comparable normalised headline earnings per share rose 15% to 1222 cents. A dividend of 248 cents per ordinary share was declared. As reported in the interim results, the factors set out below have significantly affected comparability with the results of the prior year and need to be considered when assessing performance for the 2016 financial year: The completion on 31 August 2015 of the divestment of the generics business conducted in Australia as well as certain branded products distributed in Australia to Strides group companies, the related termination of license arrangements in Australia and the completion on 1 October 2015 of the divestment of a portfolio of products distributed in South Africa to Litha Pharma (collectively “the Divestments”). The Divestments gave rise to a pre-tax profit on disposal of R1,6 billion. However, as a consequence of the timing of these transactions, the contribution to the trading results by the Divestments is substantially reduced in the 2016 financial year. In the period from 1 July 2015 until the effective date of divestment, revenue from the Divestments was R0,2 billion whereas revenue from the Divestments for the year ended 30 June 2015 was R1,8 billion. The economic situation in Venezuela deteriorated over the year to 30 June 2016 and the Venezuelan authorities have increasingly limited authorisations to pay for pharmaceutical imports using the official DIPRO rate during this period of between Venezuelan Bolivar (“VEF”) 6,30 and 10,00 per US Dollar (“USD”). As a consequence of the limited payment approvals and the uncertain economic and political situation in Venezuela, before reporting the interim results for the 6 months ended 31 December 2015 , the Group concluded that it would be more appropriate to apply the DICOM exchange rate (VEF628.34 per USD at 30 June 2016) to report the Venezuelan business’ financial position, results of its operations and cash flows for the year ended 30 June 2016. This has resulted in a one-off currency devaluation loss on foreign denominated liabilities of R870 million. The profit arising from the Divestments, the currency devaluation loss and the hyperinflationary adjustments relating to Venezuela are excluded, in addition to other specific non-trading items, in determining normalised performance. In order to provide meaningful comparability of the financial performance of the ongoing underlying business, a comparable measure has been determined by removing the contribution from the Divestments and including the results of Aspen’s business in Venezuela translated at VEF628.34 per USD in the prior reporting period. The key performance measures for the Group for the year ended 30 June 2016 and the percentage change from the prior year are summarized as follows: Revenue Operating profit before amortisation HEPS** Comparable normalised*** R35,4 billion +12% R9,4 billion* +9% 1 222,0 cents +15% Normalised R35.6 billion -2% R9,5 billion* +3% 1 263,7 cents +10% Unadjusted R35,6 billion -2% R9,6 billion +7% 889.0 cents -23% * operating profit before amortisation, adjusted for specific non-trading items ** headline earnings per share *** The comparable information has been derived from the reviewed financial information and has not been reported on by Aspen’s auditors. This information has been prepared for illustrative purposes only and is the responsibility of the Board of Directors of Aspen INTERNATIONAL BUSINESS The International Business increased comparable revenue 19% to R18,9 billion and grew comparable operating profit before amortisation, adjusted for specific non-trading items (“EBITA”), 15% to R5,9 billion. Commercial revenue from pharmaceutical product sales to health care providers in Europe and the Commonwealth of Independent States (“Europe CIS”) improved 22% to R8,5 billion. The acquisition of Mono-Embolex, a thrombolytic product with almost all of its sales in Germany, in the second half of the previous year further strengthened Aspen’s portfolio in this therapeutic area. In Latin America (excluding Venezuela), revenue to customers increased 3% to R3,5 billion. Nutritional sales were the growth driver, increasing 18% and Infacare was successfully launched in Mexico, securing an important government tender. Aspen has suspended trade in Venezuela pending an improvement in the economic conditions. Sales to customers in the North America and the Middle East North Africa territories increased strongly off relatively low bases, growing by 42% and 51% respectively. Manufacturing revenue continued to advance with particularly strong growth in active pharmaceutical ingredient (“API”) sales of 19% to R4,0 billion. The installation of a new high speed pre-filled syringe filling line at Aspen Notre Dame de Bondeville was completed during the period and commercial production is underway. At Aspen Oss the capital expenditure projects include adding new production capabilities and maintaining the sustainability of the site. SOUTH AFRICAN BUSINESS Comparable revenue in South Africa was down 1% at R8,1 billion. Nutritionals products maintained their growth momentum, adding 11% to revenue and there were impressive increases in manufacturing revenue for both APIs (+52%)… Continue reading Aspen’s comparable revenue increases by 12% to R35.4 billion
