| Mon 20 Aug 2007, 13:01 | | APN - Aspen Pharmacare Holdings Limited - Press re |
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APN
APN
APN - Aspen Pharmacare Holdings Limited - Press release
Aspen Pharmacare Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1985/002935/06)
Share code APN & ISIN: ZAE000066692
("Aspen")
PRESS RELEASE
Aspen one
Aspen operating profit exceeds R1bn
Johannesburg - JSE listed Aspen (Apn), Africa`s largest pharmaceutical
manufacturer, has announced a sound set of results for the financial year ended
June 30, 2007. These results take into account the higher effective tax rate of
28,9% (2006:25.3 percent).
Revenue increased by 17% to R4,026 billion (R3.449 billion).
Operating profit increased by 20% to R1,077 billion (R968 million).
Headline earnings per share (HEPS) grew by 13% to 210,1 cents (185.4 cents).
Capital distribution of 70 cents (62 cents) per ordinary share was declared.
Stephen Saad, Aspen Group Chief Executive said "these are solid results. The
South African pharmaceutical division has performed well again and there has
been excellent growth in the ARV business. We are now the largest
pharmaceutical company in the private market as well as in the public sector.
Our international business has also recorded good growth."
SOUTH AFRICAN OPERATIONS
The South African business remains the key driver of the Group`s performance.
Revenue grew by 15% to R3,266 billion (R2,849 billion) and EBITA showed a 20%
increase to R1,053 billion (R913 million).
The Pharmaceutical Division underpinned the strong returns of the South African
business. Revenue increased by 17% to R2,397 billion (R2,054 billion). Adjusting
for the effect of the sale of 50% of Fine Chemicals Corporation (Pty) Limited
(FCC) midway through the prior financial year, revenue increased by 20% on a
like-for-like basis. Finished dosage form (FDF) pharmaceuticals showed a 19%
increase in revenue. In April 2007, Aspen topped the market share charts for the
total private pharmaceutical market for the first time. The Group retained its
generic leadership position with an unchanged 35%. Aspen increased its share of
the over-the-counter ("OTC") market, despite this sector`s pedestrian growth.
\more
Aspen Two
Sales of FDF ARVs reached R439 million, denoting a growth of 65%. Aspen
increased its ARV offering towards the end of the financial year with the
introduction of VireadRegistered and TruvadaRegistered, originator products
distributed on behalf of Gilead Life Sciences, which are considered amongst the
leading treatments available for HIV/AIDS today. Aspen has achieved strong
growth in the export of ARVs into Africa and it is one of the leading suppliers
of ARVs on the continent reaching some 500 000 patients.
The Consumer Division reported satisfactory growth in revenue of 9% to R869
million. Toothpastes and infant nutritional brands delivered good increases.
Investment in Aspen`s Group Operation`s production capabilities continued, with
the total investment since 2003 set to pass R1 billion in the year ahead. The
construction of the Sterile Facility is nearing completion with commercial
production scheduled for the second half of calendar 2008. An upgrade project
on the heritage General Facility has commenced which will add capacity and
technology to this facility. An extension to the Oral Solid Dose (OSD) Facility
will realise additional bottle packing capacity to cater for the increasing
demand for this packaging format for ARVs.
INTERNATIONAL OPERATIONS
The international business increased revenue 26% to R760 million and raised
EBITA by 31% to R145 million. These results benefited from a full year of
contribution form the Astrix joint venture (2006: contribution for six months).
Aspen Australia was the leading contributor to the international business.
Results were bolstered by selective product portfolio expansion and a
strengthening of the Australian dollar relative to the rand. Revenue increased
by 28% to R509 million (R396 million) and EBITA increased by 35% to R71 million
(R53 million).
Aspen Resources, the UK-based intellectual property and sourcing company, also
benefited from relative Rand weakness in growing EBITA by 40% to R56 million.
Poor performance with a negative contribution to EBITA of R4 million was however
recorded by Co-pharma, the Group`s other UK-based company which trades in the
commodity generics sector. Aspen`s USA business is focused on assessing market
opportunities in that territory and trading activity was not material.
Astrix, the Indian-based manufacturer of ARV APIs, which is 50% owned by Aspen,
experienced reducing margins in the second half of the year as competition in
this market intensified. Supply of the ARV APIs to Aspen accounted for almost
half of the Astrix revenue.
Aspen Three Last
PROSPECTS
Aspen is well set to maintain its leadership position in the South African
pharmaceutical market. Growth prospects for the year ahead are positive, with
the investment made in the product pipeline and the production facilities
expected to give added momentum to the Group`s performance.
Announcement of the public sector tender awards for the next two years is
imminent. Aspen is optimistic that it will secure an increased share of this
business. The ARV tender is due for submission later this year for award early
in 2008. Aspen expects to remain an important supplier of ARVs to the South
African government.
Aspen`s growth trajectory in ARVs is expected to be maintained. The Group has
the production capacity and the product offering to deliver to the increased
demand for ARVs as the World Health Organisation works towards its target of
universal access by 2010.
The legislative environment for pharmaceuticals remains uncertain. This is by no
means a circumstance confined to the South African market. The responsibility
for delivery of healthcare, which is borne by governments throughout the world,
inevitably gives rise to interventions by the regulator which can influence
business prospects. Aspen continues to engage actively with the DoH on matters
such as international benchmarking and the annual price review. The nomination
of pharmaceuticals as a strategic industry by the South African governments is
taken to be an extremely positive development. Aspen looks forward to working
with government in building the industry in South Africa.
The continued investment in the Group`s manufacturing facilities is of strategic
importance. This investment has allowed Aspen to raise its manufacturing
standards, which is particularly pertinent with South Africa`s entry into the
Pharmaceutical Inspection Convention ("PIC") with effect from 1 July 2007. The
manufacturing standards and capacity established by Aspen have positioned the
Group to reach export markets and to enter into manufacturing and trade
partnerships with leading multi-national pharmaceutical companies.
In an increasingly competitive global pharmaceutical market Aspen will seek to
utilize the strength of the business it has developed in South Africa to
establish partnerships and create opportunities to extend its business in
international markets. ends
Issued by: Shauneen Beukes, Shauneen Beukes Communications
Tel: (012) 661-8467 : Cell: 082 389 8900
On Behalf Of: Stephen Saad, Aspen Group Chief Executive
Tel: (031) 580-8603 : Cell: 083 303 4833
Gus Attridge, Aspen Deputy Group Chief Executive
Tel: (031) 580-8605 : Cell: 083 628 8813
Date: 20/08/2007 13:01:01 Produced by the JSE SENS Department.
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