| Mon 26 Feb 2007, 13:30 | | APN - Aspen Pharmacare Holdings Limited - Press Re |
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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")
EMBARGO: MONDAY FEBRUARY 26, 2007: 13:30 Aspen one
Aspen records 15% increase in revenue
Johannesburg - JSE listed Aspen (Apn), Africa`s largest pharmaceutical
manufacturer, has recorded positive results for the period ended December
2006.
* Revenue increased by 15 percent to R1,936 billion (R1.687 billion).
* Net profit after tax rose 15 percent to R332 million (R288.5 million).
* Earnings per share increased by 13 percent to 95,3 cents (84,5 cents).
* Headline earnings per share (HEPS) increased 11 percent to 95,6 cents
(86.3 cents).
Stephen Saad, Aspen Group Chief Executive said "the Group`s key business
units performed well and the product pipeline is in good shape to support
future growth. Despite the absence of a price increase in South Africa
during the period, finished dosage form pharmaceuticals grew revenue by 21%
in this market, driven by organic growth and recent product launches.. The
5.2% pricing increase announced by the Department of Health (DoH") in
January 2007 will only reflect in second half revenue. Aspen has improved
its generic market share, despite increased international interest in this
sector. ARVs delivered good growth as the government`s roll-out plan gains
momentum. The contribution form Offshore Operations, in particular
Australia, was also pleasing."
SOUTH AFRICAN OPERATIONS
Revenue from the South African business grew by 11% to R1,550 billion and
earnings before interest, investment income, tax and amortisation ("EBITA")
by 16% to R493 million. These results are distorted by the sale of 50% of
the equity in Fine Chemicals Corporation Limited ("FCC") midway through the
prior financial year. Consequently, only half of the results achieved by
FCC are consolidated into the results for the current period. Furthermore,
the comparative period EBITA has been reduced by a R14 million write down
in the fair value of FCC.
The Pharmaceutical Division performed well, growing revenue by 14% despite
the inclusion of only 50% of FCC. On a like-for-like basis revenue growth
was 21%. Aspen has improved its generic market share over the six months
(IMS data reflects at 35% market share for the twelve months to December)
despite increased international interest in this business sector. In the
second year of a two year tender cycle, the Public Sector business has been
flat. Revenue from FDF antiretrovirals ("ARVs") increased by 66% from R104
million to R173 million.
Aspen Two
FCC, the active pharmaceutical ingredient ("API") manufacturer, matched the
strong first half performance delivered in the prior year at both revenue
and operating profit. The weaker rand and a strong export order book
should assist in maintaining this momentum.
The Consumer Division increased revenue by 6% to R432 million. Revenue
performance was influenced by a slowing in growth by the infant nutritional
range which consolidated substantial gains made in the prior year. Profit
margins have however expanded as costs have been trimmed.
High production levels have been maintained as stock levels have been
raised to ensure optimum service levels to the market. Construction of the
sterile facility is on track. Initial validation of this facility is
planned for the beginning of 2008. The sterile facility is designed to US
Food and Drug Administration standards.
INTERNATIONAL OPERATIONS
Aspen`s international operations increased revenue by 31% and EBITA by 51%.
This was achieved despite a poor performance from Co-pharma, but with the
benefit of the inclusion of Astrix, the India-based API joint venture which
commenced business in January 2006.
Aspen Australia recorded revenue of R259 million, an increase of 24%,
whilst improving EBITA by 36% to R37 million. Both Pharmaceutical and
Consumer Divisions showed robust growth with the Consumer Division
benefiting from new product additions.
Aspen Resources, the UK based intellectual property and sourcing company,
produced another positive performance, raising EBITA by 32% to R29 million.
Co-pharma returned a small loss despite increased volumes.
Astrix, which specializes in ARV APIs, increased its contribution to gross
revenue from R67 million in its first six months of trade to R80 million.
The largest portion of this increase was attributable to trade with Aspen.
PROSPECTS
The South African pipeline remains a rich source of future product launches
as a consequence of continuous attention. The DoH has established a
mechanism for annual price increases, taking into account changing economic
fundamentals to which the industry is exposed. Aspen`s implementation of
the 5,2% price increase will assist in relieving the pent up margin
pressures caused by cost inflation and exchange rate weakness over the
extended period when price increases were barred. The legislative
environment for pharmaceuticals does however remain uncertain. The
regulator has invited comment on the proposed international benchmarking
legislation. Given the proposed structure of this legislation it is not
possible for Aspen to evaluate the potential impact until greater clarity
has been achieved in respect of originator products. Aspen is confident
that the regulator will take due consideration of pertinent factors raised
in comment by the industry.
Aspen three last
Aspen`s ARV offering continues to expand by product and territory providing
scope for further strong growth in this life sustaining treatment category.
Viread and Truvada, originator products which are leading second line
treatments, will both be launched into African markets by Aspen before the
end of the financial year.
Growing capacity utilization in the oral solid dose ("OSD") production
facility will lead to enhanced production efficiencies. Opportunities to
provide manufacturing services from the OSD facility for multi-national
pharmaceutical companies are presently under consideration. There has also
been substantial international interest in the production capabilities
offered by the sterile facility due to commence commercial production
towards the end of 2008. Aspen has already concluded a long-term agreement
for production from the sterile facility with a subsidiary of Prestige
Brands Inc., a leading supplier of eye drops in the USA and Canadian
market.
As has been previously communicated, the current year is one in which Aspen
is focusing on the consolidation of past gains and on establishing the
platform for the implementation of growth strategies through to the end of
the decade. The benefits of these initiatives should be reflected in the
results of the forthcoming financial year.
\ends
Issued by: Shauneen Beukes, Shauneen Beukes Communications
Tel: (012) 661-8467
Fax: (088) (012) 6618467
Cell: 082 389 8900
On Behalf Of: Stephen Saad, Aspen Holdings Group Chief Executive
Tel: (031) 580-8602
Cell: 083 303 4833
Gus Attridge, Aspen Holdings Deputy Group Chief
Executive
Tel: (031) 580-8604
Cell: 083 628 8813
Date: 26/02/2007 13:30:57 Produced by the JSE SENS Department.
