| Mon 22 Aug 2005, 14:06 | | Aspen Pharmacare Holdings Ltd - Press release |
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Aspen Pharmacare Holdings Ltd - Press release
Aspen Pharmacare Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1985/002935/06)
(Share code APN ISIN: number ZAE000066692)
(`Aspen`)
Press Release
Aspen delivers impressive 40% HEPS growth
JSE Limited listed Aspen, Africa`s largest pharmaceutical manufacturer, has
announced record results for the financial year ended June 30, 2005.
* Headline earnings per share (HEPS) grew by 40 percent (31) to 144.7 cents
(103,7 cents).
* Revenue soared by 30 percent to R2.9 billion (R2.2 billion).
* Earnings before interest, taxation and amortization (EBITA) increased 32
percent to R831 million.
* Capital distribution of 48 cents (30 cents) was declared denoting a 60%
increase.
Stephen Saad, Group Chief Executive of Aspen said `Aspen`s impressive
performance was bolstered by the launch of a significant number of new products,
international recognition of Aspen`s world class quality development,
manufacturing and supply expertise, increased volumes, contributions from
acquisitions and co-marketing agreements`
Excellent delivery by the South African Operation resulted in a 32 percent (19
percent) revenue growth equating to a 81 percent (80 percent) contribution to
the Group. This strong revenue return was augmented by the acquisitions of Fine
Chemicals Corporation (Pty) Limited (FCC) and Nutricia (Pty) Limited.
The Pharmaceutical Division`s strong performance contributed toward a 23 percent
(22 percent) revenue increase driven by increased generic volumes, new product
launches and the FCC acquisition. The division`s results showed resilience in
spite of the pricing freezes imposed under existing legislation.
FactiveRegistered, a Gemifloxacillin Mesylate indicated for respiratory tract
infections is a new chemical entity and has been well received by the market.
New products, volume driven production efficiencies, savings from improved
procurement and the strong rand further buffered margins. Legislation
regulating the advertising of schedule 2 medicines resulted in the over-the-
counter (OTC) business being adversely affected.
Aspen`s infant milk formula business coupled with a bullish retail sector, solid
leading brands and good organic growth resulted in the Consumer Division
delivering excellent results with revenue increasing by 64 percent (11 percent).
Record production levels were attained despite service delivery and inventory
levels being affected as Group Operations struggled to meet production demand.
Aspen`s East London facility has been geared up for increased output to
facilitate the demands placed on the original manufacturing facility in Port
Elizabeth which is running at maximum capacity.
Aspen`s world class Oral Solid Dosage (OSD) facility was inspected and
accredited by the SA Medicines Control Council (MCC), the US Food and Drug
Administration (FDA), the UK Medicines and Healthcare Products Regulatory Agency
and numerous African states. These inspections hampered capacity utilization.
Anticipated continued growth in production demand has prompted the ordering of
additional equipment to meet future requirements.
Aspen`s stated objectives of providing world class local production capabilities
has been implemented in the approval for the construction of a Port Elizabeth-
based R200 million sterile facility capable of manufacturing injectables and eye
drops. Construction is scheduled to commence shortly, which could result in
production during the first half of 2007.
Aspen`s international businesses delivered a 22 percent increase in revenue to
R534 million. Aspen Australia`s revenue rose by 39 percent to R326 million
albeit in an increasingly regulated market. EBITA increased by 16% to R45
million. UK business interests Aspen Resources and Co-pharma reported EBITA of
R37 million and R9 million respectively.
The Group`s world class development and production capabilities for quality,
affordable generics were endorsed internationally when Aspen became the world`s
first generic ARV manufacturer to receive tentative approval from the FDA for
the supply of a generic triple combination ARV therapy in a co-packed form. This
recognition qualifies Aspen as the first generic supplier under President Bush`s
Emergency Plan for AIDS relief (PEPFAR) programme to which US$15 billion has
been committed. The approval is classified as `tentative` as there are still
patents over the originator products in the US. The Clinton Foundation also
acknowledged Aspen as being one of only three ARV manufactures worldwide to
participate in their HIV/Aids programme.
Aspen was favoured in the SA government`s ARV tender awarded in March 2005. The
Group will supply the bulk of tender volumes. Tender offtakes have commenced
with volumes expected to grow progressively during the three year tender term.
Aspen`s BEE shareholding could rise to nearly 18 percent following the recent
R645 million deal concluded with Imithi Consortium, a broad-based consortium
comprising healthcare industry, trade union and community development groups.
CEPPWAWU Investments, holding a 50.4% stake, is the lead participant in the
Imithi Consortium. CEPPWAWU, the investment arm of the COSATU affiliated trade
union representing Aspen employees, extended its interest in Aspen through this
transaction, having previously acquired 8% of Aspen in a BEE deal in January
2002.
Future prospects are promising given Aspen`s robust pipeline which is set to
bolster growth. The Group is ideally positioned for the expected generic switch
as the leading provider of generic medicines in both the private and public
sectors. New products will also supplement Aspen`s growing consumer product
portfolio. ARV sales locally and in the PEPFAR territories are expected to show
material growth. Increased focus on optimal utilization of production capacity
as well as increased outputs from OSD will unlock production efficiencies and
relieve capacity constraints on other production facilities. Export
manufacturing opportunities resulting from the accreditation of the OSD facility
also bode well for expansion into new markets.
Issued by: Shauneen Beukes, Shauneen Beukes Communications
Tel & Fax: (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
22 August 2005
Sponsor: Investec Bank Limited
Date: 22/08/2005 01:01:06 PM
Produced by the JSE SENS Department
