| Tue 13 Sep 2011, 13:01 | | APN - Aspen Pharmacare Holdings Limited - Press release |
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APN
APN
APN - Aspen Pharmacare Holdings Limited - Press release
Aspen Pharmacare Holdings Limited ("Aspen")
(Incorporated in the Republic of South Africa)
(Registration Number 1985/002935/06)
(Share code APN ISIN: ZAE000066692)
EMBARGO: TUESDAY, 13 SEPTEMBER 2011 Aspen one
Aspen increases revenue by 29 percent to R12.4 billion
Johannesburg - JSE Ltd listed Aspen Pharmacare Holdings Limited, the leading
pharmaceutical manufacturer in the southern hemisphere, has produced excellent
results for the year ended 30 June 2011.
GROUP PERFORMANCE:
* Revenue from continuing operations increased by 29% to R12.4 billion (R9,6
billion).
* Operating profit from continuing operations improved by 25% to R3.1 billion
(R2.5 billion).
* Normalised headline earnings from continuing operations rose 29% to R2.4
billion (R1.8 billion).
* Diluted normalised headline earnings per share (NHEPS) from continuing
operations grew by 20% to 523.3 cents (437.7 cents).
* A capital distribution of 105 cents (70 cents) per ordinary share by way of
a capital reduction has been declared.
Stephen Saad, Aspen Group Chief Executive said, "The Aspen results are a
reflection of the Group`s efforts across all of our key geographies. We had
stellar performances in Asia Pacific, Sub-Saharan Africa, Latin America and
South Africa. The South African performance was particularly pleasing given the
headwinds in the market, namely a 0% increase in selling prices, but cost
increases in salaries, wages and electricity. This vindicates our strategic
investment in manufacturing infrastructure. The acquisition of the Sigma
pharmaceutical business has performed ahead of plan and has contributed to the
improved performance in the second half of the year. Next year this impact will
be for the entire period."
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Aspen Two
SOUTH AFRICA:
Revenue from the South African business increased by 13% to R6.3 billion and
operating profit grew 17% to R1.9 billion. The Pharmaceutical division led
growth, increasing revenue by 15% to R5.2 billion. This was achieved despite its
two biggest brands, Seretide and Truvada, coming under generic competition for
the first time, as well as reduced pricing and lower than expected off takes in
the new anti-retroviral (ARV) tender which commenced in January 2011. ARV tender
volumes have been well below expected levels as Government has used substitute
donor funded product. Aspen`s successful strategy to defend the Seretide
molecule by launching its own generic, Foxair, has more than compensated for
volume declines in Seretide. The Pharmaceutical division is fundamentally in
good shape with a strong underlying growth rate. In particular, the Generic
division continues to perform, fuelled by the industry`s strongest organic
pipeline. This is further validated by Aspen retaining its 2011 Campbell Belman
Confidence Predictor Results ranking as the leading pharmaceutical company in
South Africa.
Revenue from the Consumer division increased 3% to R1.1 billion in a slow retail
market. The division responded to the fourth quarter loss of the Pfizer infant
milk formula license, which generated annual sales of approximately R250
million. In response, Aspen launched Infacare Gold as a substitute product range
as well as Melegi acidified, a specialist infant formula brand. Aspen
participated in the Government tender for infant nutritionals for the first time
and was awarded the vast majority of the volume of the products for which it
competed. This three-year tender covers eight of South Africa`s nine provinces
and will assist in closing the gap left by the Pfizer brands.
The Group has continued to invest in its manufacturing capabilities in South
Africa in order to increase capacity, enhance technical standards and improve
efficiency. Projects are underway at the Port Elizabeth, East London and Cape
Town production sites. Aspen`s production competitiveness continues to be
validated by the successes achieved in recent tender awards by the Government
for ARVs, tuberculosis, anti-biotics and infant nutritionals where the Group
competed with manufacturers from across the world.
SUB-SAHARAN AFRICA:
The Group`s gross revenue in Sub-Saharan Africa advanced by 43% to R1.3 billion
and operating profits almost tripled from R66 million to R182 million. A full
year`s contribution (prior year 7 months) from the GSK Aspen Healthcare for
Africa collaboration assisted in this substantial step-up in results. Wider
margins have contributed toward improved performance of East African-based
Shelys.
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Aspen three
INTERNATIONAL:
The International business increased revenue by 56% to R5.6 billion. Operating
profit before amortisation, adjusted for one-off non-trading items, grew 35% to
R1.4 billion.
The acquisition of the Australian-based Sigma business was completed with effect
from 31 January 2011 for a purchase consideration of AUD 863 million. The
addition of the Sigma business was the primary driver in the Asia Pacific region
increasing revenue by 122% to R3.1 billion. The original Aspen Australia
business also performed strongly, raising revenue by 33% to R1.7 billion.
Synergies between the Sigma business and the Aspen Australia business are
expected to yield cost of goods reductions from improved procurement and lower
manufacturing costs achieved through the Aspen global network.
Aspen`s Latin American businesses generated a 19% increase in revenue to R0.9
billion. Revenue from the Group`s businesses in the rest of the world was up 12%
to R1.6 billion.
The disposal of Onco Laboratories was completed in February 2011, realising a
profit on disposal of R368 million. This was the largest contributor to profits
from discontinued operations.
FUNDING:
Borrowings net of cash were R6.3 billion despite the R5.9 billion investment in
the Sigma business, with gearing at 34%.
PROSPECTS:
During the forthcoming year, revenue and profit contributions from the Group`s
International businesses are expected to exceed that of the South African
business for the first time.
It is anticipated that the Sigma business will lead growth in the Asia Pacific
region. The Group`s pipeline for Australia has been further augmented by the
conclusion of an agreement with Cipla, the leading Indian generic company, to
work together for Aspen to launch Cipla developed products in Australia. Aspen`s
representation in the region has taken a further step forward with the
commencement of the process to incorporate a subsidiary in the Philippines.
Demographics in South Africa continue to support growth in the utilisation of
medicines that could be further accelerated by the introduction of the
Government`s National Health Insurance programme.
Aspen four last
The South African Department of Health ("DoH") is presently considering the
promulgation of new regulations to implement a process of international
benchmarking of originator pharmaceutical products and to cap the logistics fees
paid in the distribution of pharmaceuticals. Aspen has been an active
participant in the formulation of industry submissions on these proposals. Both
proposals are with the DoH for reconsideration. Revised proposals can be
anticipated in the year ahead.
The Sub-Saharan African business is well placed to extend its position as the
leading supplier of quality pharmaceuticals in that region.
Leadership structures have been strengthened in Latin America and improved focus
has been achieved in Brazil with the disposal of non-core products. Aspen
continues to regard this region as having significant potential and
opportunities are being sought to improve the critical mass of the product
offering.
ends
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
Gus Attridge, Aspen Deputy Group Chief Executive
Tel: +27 (031) 580-8605
Roshni Gajjar, Aspen Investor Relations
Tel: +27 (031) 580-8649 : Cell: +27 82 879 1826
Date: 13/09/2011 13:01:14 Produced by the JSE SENS Department.
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