| Mon 21 Aug 2006, 13:02 | | Aspen Pharmacare Holdings Limited - Press Release |
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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)
PRESS RELEASE
MONDAY AUGUST 21, 2006
Aspen One
Once-offs results in 235% increase in HEPS
Johannesburg - JSE listed Aspen (Apn), Africa"s largest pharmaceutical
manufacturer, has announced impressive results for the financial year ended
June 30, 2006. These are the first set of annual results reported under
International Financial Reporting Standards (IFRS).
* Headline earnings per share (HEPS) grew by 235 percent to 185.5 cents
(144.7 cents).
* Revenue increased by 23 percent to R3.449 billion (R2.9 billion).
* Operating profit increased by 96% to R968 million (R493 million).
* Capital distribution of 62 cents (48 cents) per ordinary share was
declared. This represents an increase of 29% over the previous year
distribution and is covered 3 times by headline earnings per share.
These results have however been effected by a number of once-off
transactions in both the prior and current year, the most material of which
are:
* A charge of R282,4 million in the prior year in respect of the Black
Economic Empowerment ("BEE") transaction concluded by Aspen in June
2005.
* The claiming of the Strategic Investment Project tax allowance under
section 12G of the Income Tax Act relating to the investment by Aspen in
its Oral Solid Dosage ("OSD") facility. This has reduced the tax charge
in the year under review by R31,9 million.
* Costs relating to Aspen"s unsuccessful bid to acquire PLIVA dd, a
Croatian based generic pharmaceutical company, during the latter part of
the year under review which amounted to R21,3 million.
After adjusting for the once-offs, "normalised" headline earnings per share
increased by 32% to 182.1 cents (144.7cents).
Stephen Saad, Group Chief Executive said "Aspen"s impressive performance
was driven by organic volume growth, new product launches, a strong
performance from the consumer division led by infant milk formulations and
an increased contribution from anti-retrovirals (ARVs). This is a highly
credible performance despite the three year price freeze, an extremely
competitive generic market, regulatory limitations placed on selected
marketing activities and currency pressures."
Aspen Two
SOUTH AFRICAN OPERATIONS
The South African business continued to deliver solid results. Revenue
grew by 24% to R2,849 billion and EBITA was up 21% at R913 million. These
increases were achieved despite the disposal of 50% of Fine Chemicals
Corporation (Pty) Ltd (FCC) to Matrix Laboratories Limited ("Matrix")
midway through the year.
Pharmaceutical Division revenue increased by 24% to R2,054 billion.
Finished dosage form pharmaceuticals raised revenue by 26% mainly through
organic volume growth and new product launches. Aspen once again led the
market in new product launches.
Aspen increased volumes on award of the most recent South African public
sector tender which commenced in October 2005. ARV sales for the year were
R266 million of which more than R100 million was from exports to Africa
with the balance coming from the South African private and public sectors.
Aspen ARV"s presently cover the lives of an estimated 300 000 patients.
The Consumer Division"s revenue increased by 24% to R795 million. This
strong performance was led by Aspen"s infant milk formula brands which have
increased market share over the year. The launch of Playgirl deodorants
and line extensions to the Playboy and Vinolia brands further supported the
good performance in the consumer market.
Aspen"s Group Operations provided for continued high levels of production.
Capacities were improved in the Port Elizabeth-based OSD facility with the
addition of a second integrated granulation suite and the extension of
packing capabilities. An investment in more efficient packing equipment
was also made in the Port Elizabeth general facility. The additional
capacity has allowed Aspen to manage increased demand more effectively and
service levels are presently at an acceptable level.
Construction of the sterile facility in Port Elizabeth is proceeding well.
This R360 million rand facility will have production capabilities in
injectables, eye drops and freeze-dried vials for multi-drug resistant
tuberculosis products. The facility is planned to position Aspen at the
highest international standards in an area of niche manufacture. Initial
validation remains scheduled for the beginning of 2008.
INTERNATIONAL OPERATIONS
Aspen Australia recorded a 28% increase in revenue to R396 million whilst
improving EBITA by 22% to R53 million. The decline in operating margin
percentage is a consequence of the full year effect of a long term
distribution contract with Novartis which is only expected to become profit
generating in the 2008 financial year. The consumer offering in Australia
was expanded by the distribution of a range of deodorant brands commencing
in January 2006.
Aspen Three
UK-based Aspen Resources increased its intellectual property portfolio by
the acquisition of the deodorant brands which are distributed by Aspen
Australia. Aspen Resources increased EBITA by 12% to R41 million. The UK
commodity generic market remained intensely competitive. Co-pharma reported
a decline in revenue of 23% to R162 million and a reduction of 64% in EBITA
to R3 million.
Aspen USA was incorporated during the year. This operation is in its
formative stage and is presently focused on developing strategic
opportunities in the USA market for the Group. No material trade took
place during the year.
Aspen acquired 50% of Indian-based Astrix Laboratories Limited ("Astrix")
in January 2006 for R233 million. Astrix is jointly owned with Matrix and
provides vertical integration into the manufacture of active pharmaceutical
ingredients used in the production of ARVs. As such, revenue and profits
generated by Astrix in its transactions with Aspen are eliminated on
consolidation.
INFECTIOUS DISEASES
Aspen continues to commit substantial resources to the enhancement of its
portfolio of generic ARVs. The development of ARVs, including combination
products, are prioritised at the Group"s Pharmaceutical Research
laboratories in Port Elizabeth. Aspen will also seek opportunities to
further extend its influence in infectious diseases, particularly those
afflicting Africa.
PROSPECTS
Growth prospects are likely to be most strongly influenced by the extent of
additional generic substitution which takes place in the South African
market, the market penetration achieved by new product launches which are
driven by Aspen"s robust pipeline, the acceptance of price increases in the
South African pharmaceutical market and demand patterns in the ARV markets
serviced by Aspen. Aspen is investing in development and manufacturing
capabilities in areas identified as potential future growth drivers.
The Group is committed to remaining at the forefront of the global generic
ARV market. Significant further expansion of this market is anticipated as
UNAIDS and the World Health Organisation seek to achieve universal access
to ARVs by 2010.
\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: 21/08/2006 01:02:06 PM Produced by the JSE SENS Department
