Johannesburg – JSE Limited listed Aspen Pharmacare Holdings Limited (APN), a global multinational specialty pharmaceutical company, has announced unaudited interim financial results for the six months ended 31 December 2021. SALIENT RESULTS Aspen reported the following salient results: Revenue from continuing operations increased by 4% (+10% in constant exchange rate (“CER”) to R19,4 billion (December 2020: R18,6 billion); Normalised EBITDA from continuing operations increased by 10% (+15% in CER) to R5,7 billion (December 2020: R5,2 billion); Normalised headline earnings per share from continuing operations increased by 21% (+26% in CER) to 816.4 cents (December 2020:676,2 cents); Headline earnings per share from total operations increased by 37% (+43% in CER) to 777,2 cents (December 2020: 566,2 cents); and Earnings per share from total operations increased by 32% (+37% in CER) to 736,2 cents (December 2020: 558,4 cents); and Aspen secures right to branded COVID-19 vaccine Aspenovax[1]. Stephen Saad, Aspen Group Chief Executive said, “We are proud to announce the arrival of Aspenovax with these results. Aspenovax is testament to the skills and capabilities within Aspen and their ability to deliver at the very highest level globally. Aspen shares this proud moment with all of Africa. These results reflect both the strong operating performance within Aspen and a sound balance sheet. The progress being made to margins has been through the operationalisation of the significant historic investments. Our highlight has been the delivery of 180m vaccines to Johnson & Johnson, almost all for Africa. The business has faced and continues to face unprecedented supply chain challenges as a result of COVID-19 related impacts, exacerbated by the conflict within Ukraine. We have built great momentum in the first half and providing the geopolitical challenges do not cause further deterioration, we are hopeful to repeat this performance into the second half. Our performance and capacities within our sterile manufacturing platform has created many more opportunities. We believe this demonstration of competence will be the enabler for the enhancement of future growth. “ [1] Aspen SA Operations has undertaken the required process to assess the acceptability of the Aspenovax name with the South African Health Products Regulatory Authority. COMMENTARY GROUP HIGHLIGHTS (CONTINUING OPERATIONS) The Group has delivered double digit organic revenue growth in constant exchange rate (“CER”) and even stronger normalised EBITDA and earnings outcomes against the backdrop of challenging trading conditions. Headwinds from the COVID-19 pandemic disrupted procurement, supply, logistics, employee productivity and customer demand. Consistent supply of the COVID -19 vaccines manufactured at our Gqeberha site in South Africa further illustrated Aspen’s capability and commitment to providing access to high quality medicine to patients. The recent conclusion of an agreement with Johnson & Johnson for an Aspen branded COVID-19 vaccine, Aspenovax, will enable Aspen to make a meaningful contribution to improving equitable COVID-19 vaccine access for Africa. This has been made possible by Johnson & Johnson’s unstinting support in enabling Aspen to pursue its vision for a COVID vaccine brand for Africa, the proven capabilities of our manufacturing team in Gqeberha and the strong encouragement of a number of influential African leaders. The Group assesses its operational performance using CER and all segmental performance-related commentary is made with reference to the underlying CER trends. The table below compares performance from continuing operations to the prior comparable period at reported exchange rates and at CER. The strengthening of the ZAR (relative to the rates in the comparable prior period) against the majority of the other currencies in which Aspen trades, has diluted all reported profit and earnings metrics. The CER % change is based upon the performance for the six months ended 31 December 2020 restated using the average exchange rates for the six months ended 31 December 2021. 1 Operating profit before depreciation and amortisation adjusted for specific non-trading items as defined in the Group’s accounting policy. 2 NHEPS is HEPS adjusted for specific non-trading items as defined in the Group’s accounting policy. Group revenue for the six months ended 31 December 2021 grew 4% (+10% CER) to R19,4 billion with Commercial Pharmaceuticals remaining flat (+5% CER) and Manufacturing up 19% (+30% CER). Normalised EBITDA rose 10% (+15% CER) to R5,7 billion. This growth exceeded that of revenue due to an improved normalised EBITDA margin and the leverage provided by lower operating expenses. Normalised headline earnings per share (“NHEPS”) increased 21% (+26% CER) to R8,16, helped by reduced net financing costs. Net borrowings increased to R19,3 billion from R16,3 billion at 30 June 2021, driven primarily by deferred consideration payments relating to prior year business transactions, a dividend paid to shareholders and the weaker ZAR closing rate relative to 30 June 2021. 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 arising from COVID-19 disruption to global supply chains and logistics. On 1 March 2022, the Group successfully concluded an agreement with Acino Pharma AG for the sale of a portfolio of products in South Africa for a consideration of R1,8 billion, plus the cost of inventory, which consideration has been received. SEGMENTAL PERFORMANCE (CONTINUING OPERATIONS AT CER) Commercial Pharmaceuticals Commercial Pharmaceuticals, comprising Aspen’s Regional Brands and Sterile Focus Brands, grew 5% to R14,3 billion. Gross profit increased 6% to R8,3 billion supported by improved margins in both Regional and Sterile Focus Brands. Regional Brands Regional Brands revenue increased by 4% to R8,7 billion, with 18% growth from Australasia being the major contributor. Supply constraints severely impacted the performance of Aspen’s major Regional Brand region, Africa Middle East. Gross profit percentage was up for the period at 56.9% (H1 2021 : 56.0%), driven by cost of goods savings and favourable product mix. Sterile Focus Brands Revenue from Sterile Focus Brands increased 5% to R5,5 billion led by strong growth in Asia (+11%). This growth was against the backdrop of the prior period benefitting from strong COVID-19 related sales. A higher gross profit percentage of 61.0% (H1 2021 : 60.1%) benefitted from a favourable Anaesthetic product mix… Continue reading Aspen delivers double digit organic revenue grown in constant exchange rates
