Author: bpc

Johannesburg – JSE listed Aspen (Apn), Africa’s largest pharmaceutical manufacturer, has recorded strong revenue growth for the six months ended 31 December 2008. The positive returns were stimulated by Aspen’s recently expanded international operations. The existing businesses in South Africa and Australia have once again recorded sustained growth. Revenue increased by 91 percent to R4 264 million (R2 230 million). Operating profit increased by 84 percent to R1 163 million (R633.8 million). Headline earnings per share (HEPS) increased by 77 percent to 193.8 cents (109.6 cents). Increase in earnings per share (“EPS”) was lower than HEPS at 54 percent to 192.5 cents (125.0 cents) owing to the inclusion of non-recurring capital profits in the determination of EPS in the prior year. Stephen Saad, Aspen Group Chief Executive said “we are pleased to have delivered such positive results in a challenging operating environment. The Group’s international businesses have been the primary growth driver for the period under review. For the first time, profits from offshore operations exceeded those of the South African business. Aspen’s local presence remains strong with increased market share in all pharmaceutical categories. The Group retaining its ranking as the leading pharmaceutical company in the South African private and public market sectors.” SOUTH AFRICAN OPERATIONS Aspen’s South African business increased revenue by 32% to R2 331 million (R1 771 million). This growth was led by the pharmaceutical division which grew sales by 35% to R1 789 million driven by a substantial increase in volumes and a positive performance from recently launched products such as Truvada™, Viread™, Vectoryl™ and Aspen effavirenz. Growth in earnings before interest, tax and amortisation (“EBITA”) was limited to 10% at R586 million owing to a change in product mix due to a lower margin in public sector products, higher commodity prices, inflationary pressures and fixed pricing under both the Single Exit Pricing (“SEP”) regulations and the State Tender awards. The over-the-counter (“OTC”) division delivered good results with leading brands such as Flusin™, Lenadol® and Sinuclear® contributing positively. Aspen has successfully launched replacement products under its major slimming brands Thinz®, Leanor™ and Slenz® due to the South African Medicines Control Council’s (“MCC”) banning of d-norpseudoephedrine, the active ingredient in slimming preparations. Household brands such as Lennon Dutch Medicines®, Woodwards™ Gripewater and Guronsan® C supported the consumer division’s 22% revenue growth which is a pleasing return given the pressure felt in the retail sector. Laxative brands are being re-developed following the MCC’s withdrawal of phenolphthalein-containing products. Excellent returns were recorded by Aspen Nutritionals. The existing portfolio of infant nutritional brands such as Infacare®, S26® and SMA® was enhanced with the launch of Melegi™, which is exported to selected African countries. High levels of productivity were achieved at Aspen’s manufacturing facilities in order to respond to growing volumes. Continued investment in manufacturing will unlock additional capacity at the Port Elizabeth site. Commercialisation of eye-drops at Aspen’s Sterile Facility is expected to take place before year-end. Aspen will supply eye-drops to the USA market under a contract with Prestige Incorporated. INTERNATIONAL OPERATIONS Contributions from Aspen’s international operations increased sharply, following the Group’s recent expansion into more than 100 new markets. An increase in revenue was recorded at R1 934 million (R460 million) while EBITA rose to R630 million (R101 million). The Group also strengthened its intellectual property portfolio with the acquisition of Eltroxin™, Lanoxin™, Imuran™ and Zyloric™ from GlaxoSmithKline (“GSK”) and licensing deals with US-based Iroko Pharmaceuticals for the distribution of products into emerging markets. Revenue from global brands amounted to R696 million. Aspen Australia recorded sustained growth through the expansion of its product offering, thereby increasing revenue by 55% to R484 million (R311.7 million). Group revenue from the Latin American operations comprised 10% with sales of R408 million. The primary contributor was Brazil’s Cellofarm accounting for R330 million, with the Mexican and Venezuelan companies contributing the balance. Strategies are in place to grow the Brazilian market share, with focus being re-directed to the private sector. A brand development strategy has been initiated and 150 experienced sales representatives have been recruited for the fulfilment thereof. Construction of the manufacturing facilities in Campos, Brazil has been completed. The Brazilian authorities have accredited the Penem Facility thereby enabling the commencement of commercial production. The Penicillin Facility is awaiting final regulatory approval. Shelys, the Group’s business in East Africa, recorded revenue of R200 million in Tanzania, Kenya and Uganda. The OTC Manufacturing Facility under construction in Nairobi, is due for completion before the end of 2009. PROSPECTS Growth in South African volumes is expected to remain buoyant during the second half of the year. The 13.2% increase in SEP will offset the impact of higher supply costs. Despite trading difficulties in the retail sector, it is anticipated that the successful strategies implemented by the consumer division will yield favourable results. Additional production capacity will be realised during the forthcoming calendar year when Aspen’s three major capital projects in Port Elizabeth, valued at R1 billion, are completed. The solid dosage manufacturing and packing capabilities will cater for anticipated growth in demand from domestic and international markets. The Sterile Facility will provide Aspen with production capabilities in injectables, hormonal injectables and eye-drops for all major international markets. It is expected that the international businesses will provide significant impetus to the Group’s growth. Cognisance should be taken of influencing factors most notably global currency exposures and world market volatility. The product pipeline for the international business remains a major focus area with benefits expected to become apparent in the next two to three years. The Bangalore Oncology Facility has been accredited by the Australian Therapeutic Goods Association and commercial production is scheduled to commence in 2010. The disposal of Aspen’s 50% shareholding in Astrix remains subject to fulfilment of conditions precedent. Aspen’s performance in the first half of this financial year has shown resilience and strategies have been implemented which are designed to add to the Group’s performance in future years.

Aspen shareholders are hereby advised that earnings per share, for the 6 months ended 31 December 2008, are forecast to exceed those reported in the comparative period ended 31 December 2007, by 45-60%. Headline earnings per share are forecast to exceed those of the comparative period by 65-80%. As anticipated, a strong contribution from Aspen’s recently expanded international operations has been the leading growth driver. The difference between the quantum of the anticipated percentage increase in earnings per share and in headline earnings per share is due to non-recurring capital profits being included in earnings per share in the comparative period. The financial results on which this trading announcement is based have not been reviewed or reported on by Aspen’s external auditors. Aspen’s results are expected to be published on SENS on 05 March 2009. Sponsor Investec Bank Limited

Johannesburg – JSE listed Aspen Pharmacare Holdings Limited, Africa’s largest pharmaceutical manufacturer, is pleased to announce positive results for the year ended 30 June 2008. The Group delivered sustained growth from its existing bases in South Africa, Australia and Asia. A series of significant transactions were concluded to expand the Group’s footprint into Latin America, East Africa and more than 100 new markets globally. This sets the platform for a new growth trajectory. GROUP PERFORMANCE: • Group revenue increased by 21% to R4.9 billion (R4.0 billion). • Group operating profit improved by 14% to R1.2 billion (R1.1 billion). • Group earnings per share increased by 19% to 245.3 cents (205.7 cents). • Group headline earnings per share (HEPS) grew by 10% to 231.3 cents (210.1 cents). Stephen Saad, Aspen Group Chief Executive said, “Aspen has retained its leadership position in the South African market, while the Group has increased its presence in emerging markets with particular growth in the southern hemisphere. In addition, Aspen’s worldwide product portfolio has been expanded by the addition of four established branded products from GlaxoSmithKline (“GSK”) and an investment in an oncology franchise.” SOUTH AFRICAN OPERATIONS CONTINUE TO LEAD THE MARKET The South African business grew revenue by 15% to R3.8 billion and increased operating profit to R1.1 billion. The Pharmaceutical division recorded satisfactory revenue growth of 17% at R2.8 billion, amidst increasing pricing pressures, adverse economic conditions, sharp rises in the cost of materials and legislative challenges. The annual single exit price increase of 6.5% was granted in May 2008, four months later than anticipated. Closure of Chinese raw material facilities ahead of the Beijing Olympics led to a worldwide shortage of raw materials resulting in sharp base price increases which impacted the cost of manufactured goods. The Consumer division increased revenue by 9% to R950.9 million. Despite heightened competition and challenging market conditions, Aspen continued to be the preferred supplier to the public sector. More than 70% of the volumes in the South African government’s anti-retroviral (“ARV”) tender, awarded in June 2008, were secured, providing further evidence of Aspen’s international competitiveness. A SURGE OF ACTIVITY IN ASPEN’S INTERNATIONAL OPERATIONS Aspen Australia continued its impressive record of growth with revenue up 39% to R708.9 million and EBITA up by 34% to R95.7 million. In a market which faces price cuts, Aspen Australia delivered organic growth through innovative management, making it the sixth largest pharmaceutical company in Australia in terms of the number of Aspen products prescribed. Indian-based ARV active pharmaceutical ingredient (“API”) producer, Astrix, benefitted from the rise in demand for ARV’s. Astrix’s revenue doubled to R198.8 million with EBITA growing proportionally to R47.3 million. Aspen increased its presence in emerging markets with the conclusion of deals in Latin America and East Africa. In March Aspen acquired 50% of the Latin American businesses from Strides which are situated in Brazil, Mexico and Venezuela. This holding has since been raised to a controlling interest of 51%. In May 60% of Shelys Africa was purchased, providing access to the Tanzanian, Kenyan and Ugandan markets. Close to year-end, Aspen announced two watershed deals with leading multinational GSK. Four branded products, namely, Eltroxin, Imuran, Zyloric and Lanoxin, were acquired for GBP170 million, giving Aspen access to more than 100 new global markets. In a subsequent deal, a licensing and supply agreement was signed whereby GSK will source a range of generic products from Aspen and its Bangalore-based joint venture, Onco Therapies (“Onco”), for distribution into its developing markets. Onco will commence commercialisation of specialist oncology and generic products in 2010. COMMITTED INVESTMENT IN MANUFACTURING CAPABILITY The Group’s investment in manufacturing capabilities in South Africa continued during the year with capital expenditure of R379.3million. The upgrade to the Heritage Facility in Port Elizabeth is progressing according to schedule and is aimed at maintaining pace with increasing international production standards as well as adding capacity. The US Food and Drug Administration-accredited Oral Solid Dosage Facility, underwent further expansion to unlock additional capacity to meet increased domestic and export demand. The Sterile Facility is in the process of being validated with the commercialisation of eye drops for export into the US market expected during the first half of 2009. PROSPECTS As a consequence of the Group’s transformation during the past twelve months profits from international operations are expected to more than double during the forthcoming year. The international business currently contributes 16% to the Group’s operating profit. In spite of moderate growth from the South African business, the Pharmaceutical division is favourably positioned as the market leader in both the private and the public sectors. A healthy product pipeline has the potential to further accelerate performance. As South Africa’s generics brand of choice, Aspen is suitably positioned to benefit from the local and emerging market switch to quality generics. Increased manufacturing capabilities, a credible international presence and a diverse portfolio of products bodes well for continued growth prospects. Pricing pressures, legislation and inflationary factors continue to pose challenges to the pharmaceutical industry in general. Aspen will mitigate and manage these risks through new procurement initiatives, efficient commercial management and proactive engagement with legislators. Since its listing in 1998, Aspen has delivered an unbroken growth trajectory in both revenue and EBITA at a compound annual growth (CAGR) of 52% and 58% respectively. Shareholders have shared in this success through a CAGR of 50% in HEPS over the last ten years. The Group has embarked on a path of internationalisation by the successful conclusion of a number of strategic transactions over the past year. The acquired businesses and products add immediate value to Aspen’s earnings potential, supported by an established infrastructure which should enable growth to be sustained into the next decade. Issued by: Shauneen Beukes, Shauneen Beukes Communications Tel: +27 (012) 661-8467 : Cell: +27 82 389 8900 On Behalf Of: Stephen Saad, Aspen Group Chief Executive Tel: +27 (031) 580-8603 : Cell: +27 83 303 4833 Gus Attridge, Aspen Deputy Group Chief Executive Tel: +27 (031) 580-8605 : Cell: +27… Continue reading Aspen establishes its international platform for future growth