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ASPEN PHARMACARE HOLDINGS LIMITED - Business update for the six months ended 31 December 2021 and withdrawal of cautionary announcement

Release Date: 18/01/2022 17:00
Code(s): APN     PDF:  
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Business update for the six months ended 31 December 2021 and withdrawal of cautionary announcement

(Incorporated in the Republic of South Africa) (“Aspen Holdings”)
Registration number: 1985/002935/06
Share code: APN
ISIN: ZAE000066692
and its subsidiaries (collectively “Aspen” or “the Group”)


Against the backdrop of challenging trading conditions for the six months ended 31 December 2021, with
headwinds from the COVID-19 pandemic disrupting procurement, supply, logistics, employee productivity
and customer demand, the Group has nonetheless delivered pleasing revenue and even stronger earnings
outcomes for the six months ended 31 December 2021, measured against the comparative period in
constant exchange rates (“CER”). Revenue growth is in the following ranges:

    -   Total revenue growth between 9% and 11%
    -   Commercial Pharma revenue growth between 4% and 5%
    -   Manufacturing revenue growth between 25% and 30%

Commercial Pharma is the largest business segment, comprising Regional Brands and Sterile Focus Brands.
Performance was underpinned by solid results from both branded divisions, continuing the positive organic
growth record of the prior year. Manufacturing revenue growth was led by finished dose form sales, offset
by a negative revenue outcome from the active pharmaceutical ingredients business (“API Business”) which
suffered from the constraints imposed by COVID. Finished dose form results benefited from circa ZAR 800
million in sales from supply of the COVID-vaccine to Johnson & Johnson, showing a significant increase in
monthly output over the prior year.

The stronger ZAR relative to the comparative period diluted reported revenue growth and accordingly this
will be lower than CER revenue growth.

Normalised EBITDA (CER) growth for the six months is ahead of revenue growth with even stronger growth
in Normalised HEPS (CER), benefiting from lower finance costs. These outcomes are consistent with the
guidance for the financial year ending 30 June 2022 provided to investors in September 2021.

Further to the SENS announcement on 30 November 2021 captioned “Aspen confirms non-binding term
sheet on manufacture and sale of Aspen branded COVID-19 vaccine throughout Africa”, Aspen is actively
engaged in negotiating the terms of the definitive agreement with Johnson & Johnson. In addition, we are
awaiting to firm up confirmation of both supply and order details. It is expected that the first sales of the
Aspen branded vaccine will take place in the current financial year.

Withdrawal of cautionary

Aspen released a cautionary announcement on 9 September 2021, which was subsequently renewed, in
which shareholders were advised that Aspen had decided to embark on a structured process to facilitate
offers for all or parts of its API Business. Shareholders are now advised that, while Aspen initially received
acceptable non-binding offers for its API Business, the negative effects of COVID-19 on this business during
the period of the due diligence, and expectations of a recovery of the delta in the performance through a
stronger outcome in the second half of this financial year, has resulted in it currently being inopportune to
establish an optimum value for the API Business. Consequently, Aspen advises shareholders that the
process has been terminated and the cautionary announcement is, as a result, withdrawn.

The Group intends to release its interim results for the six months ended 31 December 2021 on 9 March
2022 – details regarding the presentation of these results to investors on 10 March 2022 will be
communicated in due course.

The financial information contained in this business update has not been reviewed or audited by Aspen’s

18 January 2022

Investec Bank Limited

Date: 18-01-2022 05:00:00
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