Aspen revenue up, but warns of ‘inevitable’ Covid-19 threat
JSE-LISTED drug maker Aspen Pharmacare reported a 3 percent increase in revenue to R18.4 billion for the six months to end December and warned that the coronavirus would inevitably impact its performance.
It said the outbreak of Covid19 had created uncertainty and resulted in its Chinese commercial team being largely inactive for a month, which would impact performance.
However, Aspen said to date its inventory holdings had been sufficient to prevent any negative impact, but this risk remained under close assessment.
The regional brands increased its revenue by 6 percent to R8.3bn, with positive growth well spread across the group while the overall Commercial Pharma business was only up by 2 percent.
In the regional brands, gross profit percentage was negatively impacted by the decline in revenues from the oncology portfolio in Europe CIS and the recall of Zantac in Australia.
Aspen said sub-Saharan Africa performed well, increasing its revenue by 7 percent, and benefited from the increased focus achieved by splitting the portfolio into two divisions.
In Latin America, revenue increased by 11 percent supported by a strong performance from domestic brands.
The group’s normalised earnings before interest, tax, depreciation and amortisation was flat at R5.26bn, while normalised headline earnings per share increased by 1 percent to 707 cents a share.
In the Sterile Focus Brands, its anaesthetics and thrombosis portfolios, it maintained a flat gross profit at R3.9bn despite revenue declining by 2 percent to R7bn.
Revenue from anaesthetics increased by 3 percent to R3.9bn, with China growing by 23 percent while Europe CIS declined by 6 percent, impacted by changes in commercial structures and ongoing anaesthetics supply constraints.
However, thrombosis revenue declined by 8 percent to R3.1bn, negatively impacted by Europe CIS, which fell by 10 percent and contributes 80 percent of the group’s total thrombosis revenue.
The group said Europe CIS commenced a commercial restructure at the start of the half and results and have progressively improved.
The group’s manufacturing business saw its revenue increasing by 6 percent to R3.2bn with the resumption of commercial sales of heparin API to third parties added R273m.
Looking ahead, Aspen anticipated a continuation of the positive progress towards the group’s medium-term priorities in the second half of the financial year.
Aspen Pharmacare shares closed 1.10 percent higher at R110 on the JSE yesterday.